Anger as Polmed CEO given R1m increase

Anger as Polmed CEO given R1m increase

A police union has approached the registrar of SA medical schemes to intervene in Polmed. |||

A police union wants registrar of medical schemes to intervene and save the SAPS’s “financially struggling” medical aid after Polmed’s board approved the CEO’s R3.4 million salary.
The move might result in the scheme being placed under administration.
The board of Polmed approved a million rand salary increase for chief executive Mbasa Mxenge, the son of Struggle activist Griffiths Mxenge.
Mxenge allegedly earns R3.4m a year excluding perks.

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Anger as Polmed CEO given R1m increase
August 20 2012 at 11:57am

GCWALISILE KHANYILE

A police union wants registrar of medical schemes to intervene and save the SAPS’s “financially struggling” medical aid after Polmed’s board approved the CEO’s R3.4 million salary.

The move might result in the scheme being placed under administration.

The board of Polmed approved a million rand salary increase for chief executive Mbasa Mxenge, the son of Struggle activist Griffiths Mxenge.

Mxenge allegedly earns R3.4m a year excluding perks.

Mpho Nkwinika, president of the SA Police Union (Sapu) said: “All we want to know is, what was this increment based on? If it was performance-based – then this is a serious problem because you can’t reward poor performance.”

Chairman of the Polmed board, Lieutenant-General Nkrumah Mazibuko said there was nothing out of the ordinary about the salary increase. “The board had commissioned the remuneration committee to look into the grading of Polmed staff salaries, including that of the CEO. The process was delayed until the salary review period. “When the board approved the grading and salary increases, everything had to be backdated,” Mazibuko said.

He added that Mxenge’s contract had a provision for performance, but would not be drawn into commenting on the performance.

Dirk Groenewald of Solidarity said it was shocking that Mxenge had received a million rand salary increase when the scheme failed to pay its members’ benefits.

“We had to fight Polmed in court for our members to get their medical benefits. Mxenge and the board must explain how this (salary increase) happened,” Groenewald said.

Sapu had, before approaching the registrar, raised the issue of Mxenge’s salary increase at Polmed’s annual general meeting last month.

In 2008 Mxenge earned R1.4m a year excluding benefits. In 2009 it went up to R1.9m.

In 2010 his salary went up to R3m and in 2011 it increased to R3.4m.

Nkwinika said Polmed became technically bankrupt in the 2009/ 2010 financial year, but was bailed out by the SAPS.

Mxenge did not respond to questions.

At the time when Mxenge was being paid a million rand salary the scheme had performed terribly, prompting the unions to say that Polmed was not getting value for money from their accounting officer.


Sapu said it had reported the salary matter to Police Minister Nathi Mthethwa.

However, Mthethwa’s spokesman Zweli Mnisi referred the matter to national police commissioner General Riah Phiyega’s office, saying it was an “operational matter”.

From 2000, the SAPS had been contributing R1.5m to Polmed, but in 2009 it was discovered that the SAPS owed the scheme R50m for the non-increase of the state grant.

At least 80 percent of Polmed’s funding comes from the SAPS in the form of a state grant.

The grant is calculated annually in advance as a lump sum which is paid to Polmed in 12 monthly tranches. The remaining 20 percent of the funding comes from member contributions.

Police spokesman Lindela Mashigo said: “The SAPS is not in a position to comment on salary matters of a separate entity.”

According to the scheme’s annual reports, Polmed’s ratio increased to 36 percent by the end of 2010 and by 2011 the scheme recorded a R700m net surplus which translates to 45.64 percent solvency level.


Polmed is also losing millions because of an “unusual arrangement” between resigned SAPS members and the scheme.

SAPS members who have resigned are claiming the right to pay only the “member contribution”, despite the fact that they are neither employees nor pensioners of the police. In March 2009, a forensic accounting firm – Fifth Quadrant – estimated Polmed’s losses of covering private members at R319m.

gcwalisile.khanyile@inl.co.za
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