The staff complement at our head offices and stores at year-end comprised the following:
| Employee statistics: | 2007 | 2006 | 2005 | |||
| Permanent full-time employees | 8 781 | 8 155 | 7 469 | |||
| Permanent part-time employees | 113 | 323 | 257 | |||
| Flexitime employees | 2 776 | 2 337 | 2 658 | |||
| Contract employees | 724 | 327 | 329 | |||
| Casual employees | 2 801 | 2 989 | 2 867 |
The gender composition of the group, already heavily weighted towards female employees, remained relatively static, with women making up 77,6% of the group’s employees, compared to 78,0% last year and 78,7% in the year before.
The group has a relatively young age profile, with an average age of 30 years and 83% of employees being under the age of 40 years. A breakdown of the group’s employees by age is depicted below, where it is evident that minor changes have occurred in the group’s age profile, most notable being the continued increase in the ratio of employees younger than 25 years and minor adjustments in the contribution of older age groups.
All permanent staff of wholly-owned subsidiaries are required to join the Foschini Group Retirement Fund, which is a defined contribution fund registered in terms of the Pensions Fund Act No. 24 of 1956. The fund is administered by Foschini in accordance with an agreement approved by the Financial Services Board.
The fund is managed by a board of trustees that meets quarterly; they receive no remuneration for their services. The assets of the fund are under the control of the trustees, who are advised by external consultants.
Subcommittees for strategy and investments meet quarterly and the benefits subcommittee meets monthly.
A second portfolio option has been introduced for staff attaining the age of 55, which has a lower exposure to the volatility of the equity markets. These staff may elect to remain on the main portfolio.
Total market value of the assets of the fund at 31 March 2007 amounted to R2,6 billion, an increase of 21% over the previous year.
Pensioners were awarded an increase of 10% effective from 1 January 2007, which is in line with the pensioner increase policy of the fund to award at least inflationary increases, subject to affordability.
As required by the Pension Funds Act, 50% of the trustees are member-elected. The term of office for all employer and member-elected trustees is three years, whereafter they are eligible for re-election. Induction training is provided to new trustees and regular ongoing training is offered to all trustees.
Apart from retirement benefits, the following are provided by the fund:
The fund did not have any distributable surplus as envisaged in the Pension Funds Second Amendment Act, 2001. The Nil Surplus Scheme submitted by the fund was approved by the Financial Services Board on 12 March 2007.
Employees of RCS Investment Holdings (Pty) Ltd and its subsidiaries are not members of the Foschini Group Retirement Fund, but receive comparable benefits from the Liberty Life Provident Fund.
Where required, employees of subsidiaries trading outside of the borders of South Africa belong to umbrella funds that comply with the legislation of the relevant country.
A formal risk assessment of the retirement fund is undertaken at least annually. Taking into account mitigating factors, HIV/AIDS is still considered to be the highest potential risk to the fund. Regular actuarial valuations, external expert prevalence projections, the ability to amend the fund’s benefits and ongoing HIV/AIDS education and awareness should minimise the risk to the fund.
The Foschini Group Medical Aid Scheme is an in-house, subsidised medical aid that is aligned to best suit the needs of most employees. Membership is voluntary, except for senior employees. The average number of principal members as at the 31 December 2006 financial year for the medical aid was 2 246, covering approximately 6 847 lives in total.
The scheme is administered by the Metropolitan Health Group and is fully compliant with the Medical Schemes Act.
The Foschini Group Medical Aid Scheme board of trustees is responsible for all aspects of the scheme, which is reviewed by both the Foschini group medical aid audit committee and the external auditors. The board of trustees makes use of a medical schemes consultant and an actuary, who actively participate in monthly operational and quarterly board meetings and provide advice. The trustees and audit committee receive no remuneration for their services.
The accumulated funds ratio of the scheme at 31 December 2006 was 94,2% which is well in excess of the required minimum of 25%, but not excessive for a small in-house scheme that will be subject to greater volatility as a result of large claims.
The financial health of the scheme favourably influenced contribution increases for January 2007, where increases in contributions were 3,1% and 4,8% for the two benefit plans available, compared to 2,1% and 3,0% for the previous year, both years being significantly below medical inflation. In addition, general benefit improvements were applied to either match or exceed inflation in the various medical categories.
A risk assessment for the medical aid is undertaken at least annually, both by the trustees and the administrators. The highest risk identified by the trustees is the volatility in legislation affecting medical schemes. Keeping abreast of all current and pending legislation and adapting the fund accordingly assists in managing this risk.
An external medical aid scheme, Ingwe Health Plan, is also available to group employees and is subsidised by the group in the same way as the in-house scheme. The plans offered cater for lower income earners and provide basic health care through capitation agreements with large hospital groups. Ingwe forms part of the black-empowered African Life group and currently there are a total of 320 group employees who are members together with their dependants.
Employees outside the borders of South Africa may elect to join medical aid schemes that are similarly funded by the group.
All permanent staff of RCS Investment Holdings (Pty) Ltd and its subsidiaries are required to become members of their choice of medical plans offered by Discovery Health.
The group runs a bursary scheme for children of employees, funded by the Foschini Foundation. This scheme is independently administered by the South African Institute of Race Relations on our behalf and aims to reward academic excellence in children of employees who may otherwise not have access to tertiary education. 72,5% of these employees are from previously disadvantaged groups. Twenty bursaries were granted during the year under review, twenty are continuing from last year and five students graduated at the end of December 2006.
Low-interest loans are available to employees to assist with the costs of tertiary education for their children. These loans are available on an annual basis for each child and are repayable over two years to improve affordability.
Similarly, low-interest loans are available to employees to assist with the purchase or improvement of property. These loans are weighted towards providing greater assistance in the purchase or improvement of property within the lower price brackets. The balance on these loans at the end of this financial year was approximately R0,7 million, with 3% of qualifying employees making use of this benefit.
Employees requiring further financial assistance for home assistance may also borrow against their equishare within the Foschini Group Retirement Fund, subject to its rules. During this financial year, this lending facility was outsourced using members’ shares in the fund as security, with the result that the interest payable on these loans by employees could be reduced. The current balance on retirement fund loans is R8,2 million.
Employees are encouraged to further studies that will assist them in their current or future career with the group. Sponsorship varies according to the level of study and requires greater financial commitment from employees at higher educational levels. Assistance with matriculation study fees is 100%.
Coupled to this, we offer the Unisa Retail Certificate, an intensive one-year retail-specific diploma. 55% of the students to whom we offered a place on our Unisa Retail Certificate course were from previously disadvantaged groups. The cost to the group of this particular sponsorship amounted to R93 450.
Of employees receiving general sponsorship at the end of the current financial year, 90,0% were from previously disadvantaged groups, compared to 90,6% in the previous year.
Occupational health clinics are provided for staff at head office and satellite locations. These clinics are staffed by nursing sisters and are assisted by a medical doctor who deals with appropriate cases. Curative and preventative care is provided, including family planning, social stress counselling, health education and screening and full management of occupational health. The occupational health service also provides a full range of support services across the country, including the management of our disability benefit. The latter is an income-replacement benefit that compensates employees who are unable to work for an extended period of time owing to ill health or disability.
