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Asawu to sue the university over the WitsMed merger with Discovery

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Kayla De Jesus Freitas
October08/ 2017

Asawu is taking legal action against Wits, following a decision to merge WitsMed and Discovery.

The Academic Staff Association of Wits University (Asawu) is taking legal action against the Wits Council for its decision to merge the University of Witwatersrand Staff Medical Aid Fund (WitsMed) with the Discovery Medical Scheme.

Professor Anthony Stacey, an executive member of Asawu, told Wits Vuvuzela that the decision to merge unfairly, impacts staff by removing their retirement benefits with regards to medical aid. “Asawu is pursuing a legal challenge on the basis that staff members’ conditions of service have been substantially changed, to rescind a retirement benefit that all members were previously entitled to,” he said.

This legal action follows a poll, conducted by Asawu from September 14-20. The poll, which was open to all Asawu members, posed the question of whether legal action should be taken against the university for its decision. According to Stacey, the poll received 274 responses with 82.14% voting in favour of engaging in a legal process.

“We recognise that there are problems with the way that WitsMed is currently organised. We are not arguing to maintain the status-quo. However, we think that amalgamation with Discovery is not a solution that is in the best long-term interests of staff at Wits. We think that a better solution to the problems WitsMed faces is to build a sector-wide medical aid scheme in the higher education sector,” he added. The decision to merge followed a voting process by principal members of WitsMed and was managed by the auditing firm KPMG.

According to Robert Sharman, the chairman of the WitsMed board of trustees, ten of the largest medical aid schemes were considered for the merger, however, “only Discovery was prepared to consider amalgamation because of our high pensioner ratio”.

He added that “1 721 members voted [and] 1 517 of the votes were in favour of the amalgamation.” The merger is set to be finalised at the end of October, pending the decision being approved by the Council for Medical Schemes.

Sharman told Wits Vuvuzela that he had no direct knowledge of Asawu’s legal action against WitsMed, and would not comment on the impact of the merge on the retirement benefits. “I am not able to comment on this [the impact of the merge on the retirement benefit], but the university has announced that it is committed to meeting its obligations regarding the subsidy, and the university’s chief finance officer is chairing a task team looking into this matter,” he said

According to Stacey, Asawu plans to continue pursuing legal action regarding retirement benefits but, is also currently considering further legal action against the university, as “both the vice-chancellor’s office and the chairperson of the WitsMed board issued statements that promoted the view that amalgamation was the best, or only option available for WitsMed,” he said.

Discovery Reputation Manager Thulaganyo Khensani Mthombeni provided Wits Vuvuzela with documentation which states that, “The acting registrar of Medical Schemes has approved the proposed merger between Discovery Health Medical Scheme and University of Witwatersrand Staff Medical Aid Fund.”

The document further states that the merger is set to be effective from January 1, 2018 and that any objections should be filed with the Council of Medical Schemes between September 18 and October 29.

  • This is an updated version of the print article to correctly reflect Mr Sharman’s comments.

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Kayla De Jesus Freitas