2 hours ago
33
The mayor of a Northern Cape municipality whose senior managers are being hauled to court over R73.5m of workers’ pensions that were never paid to fund administrators says employees hoping to take advantage of the two-pot system may not be able to because of the municipality’s financial problems.
Renosterberg local municipality mayor Andrew Samson also said those who have reached retirement age may also not have their full savings because the municipality has not been consistent with making contributions towards workers’ pensions due to its precarious financial position brought on by residents who fail to pay for services.
“Given the fact that we are behind with the pension fund, which is a reality that I won’t hide, at this moment we won’t be able to [ensure that the workers draw from the two-pot or get money upon retirement],” Samson said.
Last week, the Hawks in Northern Cape served summons to two former employees and a current employee of the municipality to answer to why R73.5m of workers’ pension monies were never paid to the funds’ administrators – the municipal workers retirement fund and LA Retirement Fund.
The 44-year-old former acting municipal manager, the current unit manager at the municipality, 50, and the 51-year-old former municipal manager, have been charged with fraud/theft, contravention of Municipal Finance Management Act and Pension Funds Act.
Spokesperson for the Hawks in the province, Lt-Col Tebogo Thebe, said the municipality failed to pay contributions between 2018 and 2023. According to Thebe, the two funds are the ones that reported the municipality’s non-payment.
Municipal Workers Retirement Fund’s principal officer Themba Mfeka said they are owed R15m in unpaid contributions for 47 employees from the municipality. He said they became aware of the issue when the employer was no longer transmitting workers’ monies to the fund.
Asked how this issue will affect the workers who would like to dip into one of their pots to alleviate financial problems, he said: “Without uploading contributions, the two-pot withdrawals are difficult.”
Mfeka also stated that those that reach retirement age now will be paid what is available in their fund credit, until the employer has paid all the arrears.
According to Samson, when he came into power in 2020, the municipality was besieged by financial problems that saw them being unable to pay salaries for months as there was a writ of execution on their bank account by various creditors such as Eskom and Sars. That, he said, resulted in the issues of instability and maladministration.
He said those issues precede his administration because they serve a population with an 80% unemployment rate, which means most of the residents don’t pay for services and the municipality therefore does not generate an income.
Regarding the issue of pensions, Samson said while the workers’ salary slips would show that the deductions were being made and monies being paid to pension funds, that was not so and that the employees knew that.
A 41-year-old employee who joined the municipality in 2019 said they were aware that the pension funds were not being paid to the administrators and that the municipality kept saying they were having financial challenges.
“We are aware that the municipality has not been paying. They discussed this in meetings and said it was due to financial constraints.
“A lot of people wanted to take the opportunity of this two-pot system, and they don’t even know if they will get money. It is not good at all
”Samwu general secretary in the province, Peter Demus, said the municipality has not been able to make basic obligations to employees for some time now and that there was a time they were unpaid for months.
He said they were aware that the municipality has financial challenges and that once salaries have been paid, the employer looks at other things like service delivery before prioritising the issue of third parties like pension fund.
SowetanLIVE
