‘There is no money’: EFF on municipal workers who can’t withdraw from two-pot retirement system

The Economic Freedom Fighters (EFF) has slammed municipalities who owe contributions to the pension funds of municipal workers.

This comes after the Financial Sector Conduct Authority (FSCA) report highlighted that 172 municipalities owe an amount of more than R1 billion in pension fund contributions.

EFF spokesperson, Leigh-Ann Mathys said what was worrying was that these municipalities were deducting the pension contributions from the workers’ salaries.

‘Reckless behaviour’

“This blatantly reckless behaviour is a ticking time bomb that places municipal workers at financial risk,” she said.

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Mathys said the biggest offending municipalities of this violation of Section 13A of the Pension Funds Act are George Local Municipality and Mossel Bay Local Municipality in the Western Cape, which have not paid their pension contributions in over 200 months.

“Municipalities such as the Umsunduzi Local Municipality, which is controlled by the African National Congress (ANC), and the Nquthu Local Municipality, which is controlled by the Inkatha Freedom Party (IFP), owe municipal pension funds for over 100 months respectively,” she said.

A burden to the state

Mathys said the non-payment of these contributions would burden the state which would have to bail them out.

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“The solution to this rising debt to municipal pension funds will undoubtedly be that when a crisis hits, these municipalities will pursue loans from the banking and financial sector, which will be underwritten by the state and further enrich the funders of the DA(Democratic Alliance) and ANC respectively,” she said.

Two-pot system

She said with the implementation of the two-pot system, some workers in affected municipalities may not be able to have access to their funds because of the non-payment of the contributions.

“As a result, there is a dangerous crisis pending that will affect the working class, because there is no money in their pension funds,” she added.

Mathys said EFF councillors in municipalities will be taking steps to address the non-payment of pensions in various municipalities.

“We will instruct all of our public representatives in local municipalities to write letters to the municipal managers in local government, to outline whether they have been making the required monthly contributions to the municipal pension funds of workers,” she said.