Moses Kotane Municipality denies pension fund defaults amid 18-month arrears

Moses Kotane Municipality has denied that it was not sending its councillors’ pension money to the relevant authority to ensure their pension benefits are safe for retirement.

However, the municipality, which is 18 months in arrears to the fund, is among numerous municipalities, including the metros of Ekurhuleni, eThekwini, Buffalo City, and Mangaung, listed as defaulters and lawbreakers by the Financial Sector Conduct Authority.

By not sending the money, the municipalities contravened the Pension Funds Act of 1956.

Responding to an inquiry from The Citizen about their municipal arrears, the municipality’s spokesperson, Berlina Lekgethwane, said the municipality’s factual records showed all the 69 councillors at Moses Kotane had contributed fully since their inauguration on 21 November 2021.

However, the exception was former speaker Gugulethu Mtshali, who voluntarily terminated her Municipal Councillors Pension Fund membership on 14 December 2022, and councillor Nthabiseng Mollo, who also cancelled her membership and later asked to be reinstated.  

“The Moses Kotane local municipality would like to refute these baseless claims and declare that, to date, all 68 council members except one councillor who voluntarily terminated have had their pension fund contributions made on time and in full.

“As required by applicable laws and governance norms, the Municipality continues to adhere strictly to its financial and legal commitments,” Lekgethwane said.

Lekgethwane said the municipality pledged to uphold its financial obligations, communicate honestly, be accountable, and ensure all interested parties have access to correct and validated information.

Councillors claim pension fund deductions are unpaid

Despite the municipality’s denial, some councillors were adamant that their monies had been deducted from their salaries for the pension fund but were not sent to the relevant pension fund.

They said the municipality was 18 in arrears to pay the money to the MCPF, and the FSCA had raised this matter. Moses Kotane had neither paid the arrears nor made arrangements to pay.

A concerned councillor, who preferred to remain anonymous for fear of victimisation, blamed the municipal manager, Mokopane Letsoalo, and the chief financial officer, Mzwandile Mkhize, for the situation.

“In fear of being victimised, I am worried as a councillor that money is taken from me but not paid as it should. Mokopane and the CFO Mkhize are playing a dangerous game with our lives and we must keep quiet because of fear.

“Where is the money? What was it used for? Why was the money not paid to the pension fund?” the councillor asked.

Councillor exposes pension fund crisis

“What is surprising is that the employees’ pension funds are not affected, or it’s because they will also be affected as employees should they consider leaving the municipality one day.

“What is frustrating more is that financial reports are submitted to council as if money matters are well while pensions are deducted and not being paid as it should to the relevant authority,” the councillor said.

“People of Moses Kotane will never see proper basic services any time soon because the councillors’ term is soon coming to an end in 2026 and how will the Municipal Manager and the CFO pay the monies or will they take from the equitable share monies meant for basic services and pay the outstanding arrears.

“The mayor Nketu Nkotsoe, as the head of the municipality, is misleading councillors on the financial reports of the municipality in council meetings,” the councillor added.

The councillor also questioned the auditor-general reports that failed to identify problems at Moses Kotane.

“One is also starting to worry and doubt the AG report and the municipality audit opinion. The question is, what is the opinion of the AG on the non-compliance, or is it being brushed off?”

Former council speaker Gugu Mtshali once raised the councillors’ pension issue at a council meeting, but she was ignored, subsequently targeted, and marginalised with no support from fellow councillors. She recently resigned from the council.

Salary boost for Moses Kotane councillors

Meanwhile, on Wednesday, Moses Kotane Municipality councillors approved a salary increase for themselves amidst calls for them to account for the non-payment of pension fund dues for councillors.

The hike would see Nketu Nkotsoe, as mayor of the Category 4 municipality, receive a salary of R984 320, up from R955,651, while the speaker and chief whip would obtain R787 456, up from R764,518.

The members of the mayoral committee would get up to R738 583 (R716 738 presently), while part-time ordinary councillors would obtain R311 501 (R302 428 currently).

Salary increases for councillors were published by the Minister of Cooperative Governance and Traditional Affairs, Velenkosini Hlabisa, on 17 October 2024, and the hikes.

The North West MEC must approve the hikes for Cooperative Governance and Traditional Affairs before implementation.

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