GRAAFF-REINET NEWS - On Tuesday 26 October the Dr Beyers Naude local municipality issued a media statement relating to the notorious pension fund debacle.
This is the first time that the municipality has spoken out on the issue after it came to light that they failed to pay over municipal workers’ pension fund contributions to the relevant pension fund since September 2019.
According to the media statement, the municipality "has been upfront on all platforms regarding their financial position and the challenges experienced with cash flow."
The municipality confirmed that they have "a monthly cash shortfall of between R4- and R10-million due to serving historical debt and creditors" but stated that "a financial recovery plan is being implemented with priority given to statutory payments."
Regarding the pension fund debt, IOL News reported in an online article which was published on 25 October 2021 that the Hawks (Directorate for Priority Crime Investigations) are probing the Dr Beyers Naude Municipality for failing to pay R2,2-billion in employee contributions to the pension fund.
The municipality stated that the "information contained in the article is non-factual as in no uncertain terms has the municipality defaulted on payment of statutory payments to the amount of R2,2-billion."
In response to a written question relating to the pension fund debt that was submitted by Democratic Alliance (DA) Samantha Graham-Maré, the Minister of Finance, stated that outstanding debt was at R16-million on 8 September 2021.
The press statement confirmed that this amount remained outstanding as at 11 October 2021 but that payment plans are in place. In addition, the municipality stated that they "have no knowledge of the Hawks investigations on statutory payments’ but that they have been in contact with the Hawks investigation officers regarding cases directed to them by Dr Beyers Naude local municipality."
However, in response to a parliamentary question relating to the case that was opened against the municipal manager under Section 13A of the Pension Fund Act, the minister of police confirmed in September 2021 that the case is, in fact, currently being investigated by the Directorate for Priority Crime Investigation, Serious Commercial Crime Investigation Unit, in Gqeberha.
It is unfortunate that, even though the municipality stated that they are aware of their legal obligations and that statutory payments are receiving the necessary attention, the pension and death benefits of municipal employees remain at risk two years after the date of the initial default.
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