GRAAFF-REINET NEWS - Despite commitments to the contrary, the Dr Beyers Naudé Local Municipality (DBNLM) remains in default concerning the settlement of its pension fund debt.
After it came to light that the municipality failed to pay municipal workers' pension fund contributions to the relevant pension fund since September 2019, National Treasury wrote to the municipality early in October 2020 and requested settlement of the outstanding debt.
In his response to National Treasury late in October 2020, the Municipal Manager, Dr Eddie Rankwana, acknowledged the debt and committed to settle the amount in full by 15 of December 2020.
At the time, Democratic Alliance (DA) Member of Parliament, Samantha Graham-Maré, managed to establish that the outstanding debt amounted to an estimated amount of more than 25 million, irrespective of the fact that pension fund deductions have been made from the salaries of municipal employees and councilors.
However, despite having given its assurances to do so, the municipality failed to meet its commitment to settle the debt by 15 December 2020.
Subsequently, on 24 February 2021, an agreement was reached between the trade unions, SAMWU (South African Municipal Workers Union) and IMATU (Independent Municipal Trade Union) and the municipal manager in terms of which the amount of R10-million would be paid over to the pension fund before the end of that particular week.
This never happened since, allegedly, the overdraft that the municipal manager and the chief financial officer attempted to secure from FNB in Cradock to pay the pension fund was not approved.
According to Amos Mcinga, spokesperson of the Service Delivery Movement (SDM), instead of honouring the commitment made to the workers, the municipality's director of community services, Gewnynne Hermanus, then served striking municipal workers, disgruntled by the pension fund debacle, with letters of intention to suspend.
When the union leaders confronted the municipal manager about the letters, he claimed that he was unaware of the letters and that Hermanus served it without his instruction.
On 4 March it was confirmed by Ivan Jaftha, union representative of IMATU, that municipal workers have returned to work after a commitment was made that the way forward regarding the pension fund issue will be discussed by the trade unions and the municipal manager on 9 March. Unfortunately, the issue remained unresolved.
Graham-Maré believes that the minister of finance's recent response to her written question relating to the progress made with payment is "extremely disappointing".
Even though some effort has been made to make payments, the outstanding debt was at R16-million on 8 September.
In effect this means that the pension and death benefits of municipal employees remain at risk. These benefits have been at risk since the date of the initial default two years ago. In the meantime, the municipality has been attempting to settle outstanding amounts on a case-by-case basis as people retire or pass away and this remains an unacceptable situation, says Graham-Maré.
According to Graham-Maré, the feedback from the minister of finance highlighted a glaring issue with current legislation in that there is insufficient scope for the ministry or national treasury to enforce compliance by municipalities.
"The one mechanism that can be used to compel the municipality to meet its financial obligations is for National Treasury to withhold equitable share monies. These are monies paid to the municipality to cover costs such as the indigent subsidies and councilor salaries. Whilst it certainly is a powerful deterrent, it could have unintended consequences by impacting the municipality's ability to pay other debt."
This means that, until legislation is amended, there is little recourse to hold the municipality to account. Considering that it is illegal to withhold payment of pension fund contributions, Graham-Maré also laid criminal charges against the municipal manager under Section 13A of the Pension Fund Act in December 2020.
In September 2021 Graham-Maré received feedback on a parliamentary question submitted to the minister of police concerning the case. The minister of police confirmed that the matter, as per Graaff-Reinet, CAS 69/12/2020, is currently being investigated by the Directorate for Priority Crime Investigation (DPCI), Serious Commercial Crime Investigation Unit, in Gqeberha.
According to the minster of police the investigation is progressing and the municipality is cooperating. Bank statements have already been obtained and analysed. In addition, three affidavits have been obtained and the investigation plan for obtaining the outstanding affidavits from five identified persons is in place.
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