Employees and Employee Benefits

Staff complement

The staff complement at the group’s head offices and stores at the year-end comprised the following:

Employee statistics: 2008 2007 2006 2005
Permanent full-time employees 9 311 8 781 8 155 7 469
Permanent part-time employees 289 113 323 257
Flexitime employees 2 600 2 776 2 337 2 658
Contract employees 568 724 327 329
Casual employees 2 221 2 801 2 989 2 867

The gender composition of the workforce, already heavily weighted towards female employees, remained relatively static, with women making up 78,2% of the total compared to 77,6% in the previous year and 78,0% in the year before.

The group has a relatively young age profile, the average age being 30 years and 83,6% of the total being under the age of 40 years. A breakdown of the group’s employees by age over a two-year period is set out in the following chart, from which it is evident that minor changes have occurred.

Age distribution

Retirement funding

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. The trustees receive no remuneration for their services. Particular attention is paid to trustee training, to ensure that they remain abreast of legislative changes and developments within this specialist area. The assets of the fund are under the control of the trustees, who are advised by external consultants.

Sub-committees for strategy and investments meet quarterly and the benefits sub-committee 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 2008 amounted to R2,6 billion, which is unchanged from the previous year. Fund returns reflected an increase of 16,4% during its financial year, but a particularly high volume of withdrawals and retirements have resulted in the unchanged financial position.

Pensioners were awarded an increase of 10% effective from 1 January 2008, 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, after which they are eligible for re-election. Trustee elections will be held during the 2009 financial year. Induction training is provided to new trustees, who also participate in the regular ongoing training noted above.

Apart from retirement benefits, the following are provided by the fund:

  • a funeral benefit of R7 500 for the principal member and spouse and a lesser benefit for their dependent children;
  • a death benefit of three times annual salary as well as the member’s gross equishare is available to provide benefits to dependants and beneficiaries, payable in the event of death in service and where the death is accidental, a further benefit of twice annual salary is payable; and
  • an insured disability benefit is provided to qualifying staff members, equating to 75% of pensionable salary earned at the time of disablement, payable until attainment of normal retirement age subject to continued disablement, after which the normal retirement benefit becomes effective.

Employees of RCS Investment Holdings (Pty) Limited 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 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 remains the highest potential risk to the fund. Risk is minimised by undertaking regular actuarial valuations, external expert prevalence projections and ongoing programmes on HIV/AIDS education and awareness. The fund is moreover able to amend its benefit levels.

The Foschini Group Medical Aid Scheme

The Foschini Group Medical Aid Scheme is an in-house, subsidised medical scheme that is designed to best suit the needs of most employees. Membership is voluntary except for senior employees. The average number of principal members at 31 December 2007 (the financial year-end of the scheme) was 2 291, covering approximately 4 690 lives in total.

The scheme is administered by the Metropolitan Health Group and is fully compliant with the Medical Schemes Act.

The board of trustees of the scheme is responsible for all aspects of its operations, which are 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 provide specialised advice and participate in monthly operational and quarterly board meetings. The trustees and audit committee receive no remuneration for their services.

The accumulated funds ratio of the scheme at 31 December 2007 was 92,4% 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 than the norm as a result of sporadic large claims.

The financial health of the scheme favourably influenced contribution increases which took effect in January 2008, the increases being 4,5% and 7,5% for the two benefit plans available compared to 3,1% and 4,8% for the previous year. In both years the increases were significantly below medical inflation. In addition, general benefit improvements were applied to match or exceed inflation in the various medical categories.

A risk assessment of the scheme is undertaken at least annually, both by the trustees and the administrators. The highest risk identified by the trustees is the volume of legislation affecting medical schemes. Keeping abreast of all current and pending legislation and adapting the scheme’s rules accordingly assists in managing this risk.

Other health plans

An external medical 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 healthcare through capitation agreements with large hospital groups. Ingwe forms part of the black-empowered African Life group. Currently a total of 318 group employees are members, together with their dependants.

Employees outside South Africa may elect to join medical schemes that are similarly funded by the group.

All permanent staff of RCS Investment Holdings (Pty) Limited and its subsidiaries are required to become members of a medical plan of their choice offered by Discovery Health.

Bursary scheme

The group operates 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.

Educational assistance

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.

Home assistance

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. In the past year R264 000 was lent to qualifying employees who made use of this benefit. Of these employees 86% were from previously disadvantaged backgrounds.

Employees requiring further financial assistance for home purchases or improvements may also borrow against their equishare in the Foschini Group Retirement Fund, subject to its rules. This is an outsourced lending facility, using members’ shares in the fund as security, with the result that the interest payable by employees is minimised. The total of these loans at the year-end was R6,9 million.

Sponsorship

Employees are encouraged to undertake 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. Support for matriculation study fees is 100%.

Coupled to this, the group offers sponsorship for the Unisa Retail Certificate, an intensive one-year retail-specific diploma.

Of employees receiving general sponsorship at the end of the current financial year, 89% were from previously disadvantaged groups, a percentage similar to that of previous years.

Healthcare

The group has delegated the management of occupational health to an external service provider. Curative and preventative care is provided from a centrally located occupational health clinic permanently staffed by two nursing sisters with qualifications in occupational health. A medical doctor is on site twice a week to assist with cases requiring specialised attention.

The clinic provides a service to all employees working at the head office campuses as well as those at the distribution centres.

Services offered include family planning, HIV testing, primary healthcare, counselling for psycho-social stress, health education and health screening.

The service provider is also responsible for the management of ill health within our stores through the WAKE programme, as well as any injuries on duty in terms of the Commission for Occupational Injuries and Diseases Act (COIDA). It also facilitates the group's disability benefit processes, which provide an income-replacement benefit to employees who are unable to work as a result of ill health or injury for an indefinite or fixed period of time.

Staff safety

The group is committed to ensuring a safe and healthy working environment for all of its staff. Like most other retailers, it operates within a low risk environment.

The group complies with all relevant legislation, in particular the Occupational Health and Safety Act of 1993.

The statistics for reported incidents involving staff members of the group are set out below:

  2008 2007
Number of working days lost 1 399 1 465
Number of incidents 340 399
Average cost per incident R339 R371
Total cost of incidents R115 389 R148 196

The majority of incidents reported were minor, and there were no fatalities. In 232 instances, not more than three working days per incident were lost, compared to 278 last year.