64 employees have been unable to retire because they were precluded from accessing their retirement funds.
News24 has reported that several municipalities across the country have defaulted on paying over employer contributions to workers’ pension funds.
According to a recent parliamentary reply, municipalities in some of the country’s poorest municipalities have failed to transfer employer contributions resulting in the lapse of pensions belonging to about 1,600 municipal and 64 employees’ inability to retire because they were precluded from accessing their retirement funds.
Cillier Brink, the Democratic Alliance’s (DA’s) spokesperson on local government, said the party would be lodging criminal complaints against the municipal officials involved. "Hundreds of millions in interest has also accrued on these outstanding pension transfers - effectively for the account of residents and ratepayers," Brink added.
In a reply to a parliamentary question, Finance Minister Tito Mboweni revealed the Free State, North West and Northern Cape were the provinces mostly affected by the default in pension fund contributions.
Mboweni added: “The provinces that do not seem to have cases of non-payment of pension fund contributions are Gauteng (GP), KwaZulu-Natal (KZN), Mpumalanga (MP) and Western Cape (WC).”
He added that the National Treasury would engage with the relevant authorities (provinces, regulators and national departments) to consider more effective and quicker responses in respect of such non-payment of contributions to retirement funds by any organ of state. Mboweni advised that the practice of non-payment of pension contributions to pension funds by employers was a criminal offence in terms of Section 13A of the Pensions Fund Act after the act was amended in 2013.
