Councils take pension billions

Municipal workers countrywide have seen billions in pension payouts evaporate because their employers – 150 councils – have failed to pay their contributions to retirement funds.

More than R1 billion in missing contributions – some going back as long as 20 years – means that employee pension payouts could be less than half what they expected, because that money could have been growing at what unions conservatively Estimate as a rate of inflation plus 1%.

Pension funds worth millions

Cosatu spokesperson Matthew Parks said his organisation support any action to fight against the employers defaulting on millions of rands of pension funds.

Cosatu would continue to support its affiliate, SA Municipal Workers’ Union’s (Samwu) efforts in its struggle to compel the municipalities to do the right thing, Parks said.

“This is theft and must be treated as the criminal act it is,” he said.

The Citizen understands four municipalities in Mpumalanga were recently caught reportedly defrauding employees of their pension fund.

Court judgment

The Mpumalanga High Court recently ordered the attachment of the movable assets of the Mkhondo local municipality to recoup more than R7 million that the municipality had failed to pay to the Municipal Workers’ Retirement Fund.

“We welcome this court judgment and look forward to similar decisive actions to deal with such employers,” said Parks.

“However, more must be done, including attaching the personal property of these delinquent employers and holding such municipal managers personally liable.

“We are concerned about the possible disruption to service delivery in this municipality if essential equipment is attached.

“The mayor, manager and council must act as working-class communities should not be made to suffer because of their delinquent action.”

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Pension laws

Cosatu would continue to push the National Economic Development and Labour Council (Nedlac) and parliament to tighten relevant labour and pension laws to ensure the stoppage of stealing workers’ hard-earned pension funds, Parks said.

South African Local Government Association’s Tebogo Mosala refused to comment. “We are not in a position to provide comment.

“It is important for the organisation to thoroughly study the outcome of the court ruling and engage with the municipality involved to gather all relevant facts and information.”

Appointment of unskilled workers

Mkhondo municipal spokesperson Robert Kubheka was contacted on Thursday and promised to comment, but failed to do so. Irene Brussow, DA caucus leader in Mkhondo, has called on the provincial government to place the municipality under administration.

“These are the ramifications of cadre deployment. Appointing unskilled individuals in key positions will leave employees and public representatives in this municipality scrambling for their hard-earned retirement funds,” Brussow said.

Samwu Mpumalanga secretary Sam Lekhuleni said the union was aware of the nonpayment of pension fund contributions by the Mkhondo municipality. “Initially, the municipality hid this from workers.

“We then concluded it was done deliberately to steal the worker’s benefit and we view it as part of the corruption in municipalities.

“Money allocated for specific purposes is diverted and used for other unintended purposes that benefit certain elites,” he said.

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Medical aid contributions not paid

Similar fraud allegedly happened in the province’s Nkomazi local municipality, whereby medical aid and pension fund contributions were not paid, while Govan Mbeki municipality also experienced the same thing, Lekhuleni claimed.

“It is important that a proper investigation is done to establish the extent of this because it also includes medical aid.” Some municipal workers are struggling to get the pension benefits to which they are entitled.

One pensioner said: “I worked for the municipality for more than 30 years and received a mere R600 000, while my pension fund statements showed I should have received more than R1 million.

“After I spoke with my union, I realised the problem was with the fund’s administrator.”

Contradictory statements

Elvis Mashele, an employee at the Bushbuckridge municipality, was also short-changed. “I have been receiving contradictory statements showing different amounts.

“Some of the statements show that the amount has been slumping instead of increasing. “We are currently fighting with the administrator and have taken it to court to see what exactly is happening.

“The officials from the fund conceded there were errors in our statements but did not give details,” said Mashele.

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