KAROO NEWS - Over R25-million in local pension funds are outstanding, after the Dr Beyers Naudé Local Municipality (DBNLM) deducted contribution funds from its employees but failed to transfer these deductions to the employees' pension funds.
The defaulted payments by the municipality, total to R25 982 074.82.
"Those retiring next year are terrified that they won't have a pension to sustain them," DA MP Samantha Graham-Maré told the Advertiser. Information about the non-payment of pension funds came to light in a parliamentary response from Finance Minister Tito Mboweni, following questions submitted about the matter by Graham-Maré.
"The National Treasury will engage with the Financial Sector Conduct Authority (FSCA) to start collecting data as part of the regular statutory returns by municipal retirement funds," Mboweni said.
The parliamentary reply indicated that DBNLM is among 25 councils that defaulted on pension fund payments.
In the Eastern Cape, these municipalities also include Sundays River Valley (R1 192 370), Great Kei (R627 525.82), Amahlathi (R6 058 151.01) and Walter Sisulu Local Municipality (R8 936 753.31).
Information acquired by News24 indicates that DBNLM is up to date with pension fund contributions, but the municipality stated that there was a pending High Court case about a dispute with Samwu Provident Fund. The dispute is about contributions which increased from 2007 to 2013 and amounted to R17-million. "The municipality is disputing the amount," the report read.
According to Graham-Maré, she has laid charges against Municipal Manager of DBNLM, Dr Edward Rankwana, based on non-compliance with Section 13A of the Pension Fund Act.
"The municipality's [failure to pay over deducted pension funds] is an egregious breach of trust by the municipality," said Graham-Maré. "It has direct impact on the future financial security of its employees." The MP added that employees have lost over a year's growth in value on their exiting pensions. "It is disgusting to treat your employees like this, the municipality should be ashamed," she added.
The DA said this week that they will also follow up with the FSCA to determine how they will address this matter.
DBNLM was approached for comment but failed to respond in time for print.
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