GRAAFF-REINET NEWS - Municipal employees are at risk of claims for pension payment or disability being rejected, as R10 million was owed to pension funds at the end of December, according to section 52 of the quarterly financial report of the municipality.

Since last year, the Dr Beyers Naudé Local Municipality has not paid either the employees' or its own contributions to the pension funds for several months, despite deducting the money from the employees' salaries.

SALA will not pay benefits
On 23 January, the South African Local Authorities Pension Fund (SALA) wrote to the municipal manager, indicating the total amounts outstanding from each of the three former municipalities of Baviaans, Camdeboo and Ikwezi for September, October, November and December of last year. The combined amount is approximately R2.1 million, of which over R81 000 is interest accumulated up until the end of January.

SALA has reported this to the Financial Services Board, and stated that the SALA Board of Trustees decided to institute legal steps against defaulting councils.

"Furthermore, no benefits will be paid nor will any Member Benefits Statements be issued to the members at your Council for as long as these contributions and schedules are outstanding," concluded the letter.

Retiree denied claim
The Advertiser has seen a letter from the retirement fund administrator of a financial services company in Cape Town, which states that it is unable to process a claim for a beneficiary with a retirement date of November 2019, as no contributions had been received since August 2019.

Benefits suspended by CRF
Payments have not been made to another pension fund, the Consolidated Retirement Fund (CRF) for August, September, October, December or January. According to one member, who pays for disability benefits linked to his pension fund, he was told by the fund that benefits are suspended until payments are received, and that the employer (i.e. the municipality) will be liable to settle any claim. 

Should the municipality immediately pay up that member's arrears, including interest, the claim would be considered.

'Open criminal cases'
Cllr Eldrige Ruiters, who is a member of this fund, feels that individual affected employees should open criminal cases against the municipality. "It is wasteful expenditure when the accrued interest will have to be paid to get the contributions up to date," he stated.

Financial distress
According to Eward Loock, Chairperson of the Budget and Treasury Portfolio of the municipality, the reason for the non-payment is lack of money. "Salaries, the Eskom account, back payment of internal loans, and service delivery creditors must be paid," he explained. 

"With a service account payment rate of 79%, there is simply no money left: the municipality is in financial distress." Loock believes that the municipality has been let down after the amalgamation in 2016. 

"The government who demanded the amalgamation should at least pay the merging creditors of R65 million. Despite the desperate financial situation, national treasury has also reduced their equitable share to the municipality, which makes an already desperate situation even worse."

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