Thousands of civil servants earning less than R2 000 a month are in line for pension handouts from the R1,5 billion set aside by the government to compensate victims of discrimination in retirement funds.
Neva Makgetla, deputy director-general of Public Service Administration, told Personal Finance this week that the Pension Task Team charged with identifying categories of victims had decided to focus on the lowest paid categories of employees.
"We had to draw the line somewhere and we decided the money should go to those who need it most," said Makgetla, who is a member of the task team set up by the government and the public sector trade unions.
The government decided last year to allocate up to R1,5 billion, or one percent of the state pension fund's assets, to compensate people who were barred from full retirement benefits because of colour or gender.
The task team, which reports to the Public Service Bargaining Chamber, has been meeting since December to decide which categories of people should be eligible for compensation.
Makgetla said the decision to limit those eligible to the lowest-paid employees had been a hard one to take.
"Of course there are other categories of people who should be compensated. But we only have limited funds.
"We have to accept that we cannot make good all the harm caused by apartheid."
The team had decided to focus on unskilled workers earning from about R1 650 to about R1 900 a month. Many of them had not been allowed to join a pension fund because they had been labelled as "casual" workers though some had worked for the public service for decades, Makgetla said.
There were about 150 000 public servants on these levels but only about 30 000 were likely to qualify for compensation.
Only people who were still working, not those who had already retired, would be eligible for compensation, Makgetla said.
The task team had now commissioned a study to find out how much it would cost to pay out eligible employees.
If there was money left over, other victims of discrimination would be considered, she said.
The decision to concentrate on lowest-paid civil servants will come as a blow to woman teachers, thousands of whom lost permanent status when they married and suffered retirement fund losses as a result.
Teachers' unions have been campaigning for compensation for their members.
Makgetla said the decision to set aside one percent of the state pension fund's assets would not put anyone's pension at risk.
The pension fund was a defined benefit fund, not a defined contribution fund, and the pensions of civil servants were guaranteed by the state.
Commentators have predicted that the decision by the state to pay compensation to victims of discrimination in the past could open the floodgates for people who have been discriminated against in private sector pension funds.
Some private sector funds have already taken steps to redress past discrimination but consultants have estimated that claims could still run into billions of rands.