Home News NC municipalities default on pension contributions after deducting money from workers

NC municipalities default on pension contributions after deducting money from workers


Finance Minister Tito Mboweni has revealed that five Northern Cape councils made deductions but did not pay over the pension contributions.

Minister of Finance Tito Mboweni. Picture: Phando Jikelo/African News Agency(ANA)

FIVE Northern Cape municipalities are among 25 councils in the country that collectively deducted over R3 billion in pension contributions from employees but failed to make payments to the pension fund since April.

The criminal offences by these 25 councils has led to the lapsing of pensions of 1 659 employees in five provinces.

This emerged in parliamentary responses from Finance Minister Tito Mboweni when he was responding in writing to questions from DA MP Samantha Graham.

Graham enquired about the municipalities that failed to pay over pension fund contributions since April this year and what the breakdown of the value of the contributions for each month was by municipality.

She also asked about the number of employees whose pensions have lapsed as a result of non-payment by the affected municipality and action that would be taken against the culprit municipalities, among other things.

In his response, Mboweni said he was unable to currently provide a comprehensive response to the questions.

“The National Treasury will engage with the Financial Sector Conduct Authority (FSCA) to start collecting such data as part of the regular statutory returns by municipal retirement funds.

“However, such practice of non-payment of pension contributions to the pension fund by employers is a criminal offence in terms of section 13A of the Pensions Fund Act, after the act was amended in 2013,” said Mboweni.

His responses showed the defaulting municipalities are five in the Northern Cape, four in the Eastern Cape, nine in the Free State, one in Limpopo and four in North West – which collectively defaulted on payments totalling R2,971,258,436.14.

The five Northern Cape municipalities are Kamiesberg, which defaulted with R1,344,042; Renosterberg R5,274,175.62; Kai !Garib R5,436,667.35; !Kheis R9,123,276.57; and Magareng R1,360,000.

In the Eastern Cape, Dr Beyers Naude Municipality did not pay over a staggering R2,598,207,482 to pension funds; Sunday River Valley R1,192,370; Great Kei R627,525.82; Amahlathi R60,558,151.01; and Walter Sisulu R8,936,753.31.

The Free State municipalities include Kopanong with R113,120,103; Mohokane R60,970,287; Masilonyana R6,317,312; Matjhabeng R16,558,368; Dihlabeng R3,540,987; Nketoana R7,692,608; Maluti-a-Phofung R5,598,892; Mantsopa R3,200,000; and Mafube R6,971,185.

Limpopo has Elias Motsoaledi Municipality, which defaulted with R254,633.

The North West’s municipalities are Kgetlengrivier R3,507,344.20; Tswaing R27,647,776; Naledi R11,655,185; and Mamusa R12,163,312.26.

There were 1 659 employees whose pensions lapsed in Naledi, Mafube, Tswaing, Kgetlengrivier, Mamusa, Renosterberg and Nketoana municipalities.

There were 370 employees who were due to retire but are precluded from doing so because their pensions are on hold due to the non-payment of the contributions in Kopanong, Nkotaona, Mafube, Kai !Garib, !Kheis, Tswaing and Mamusa municipalities.

Political Bureau