Johannesburg – The Dr Beyers Naude Municipality in the Eastern Cape has deducted over R2 598 207 482 in pension contributions from its employees and failed to make payments to the pension fund since April.
The Graaff-Reinet-based municipality is among the 25 councils that collectively made deductions totalling nearly R3 billion, but did not pay over the pension contributions.
The criminal offences by these 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 the 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 four in the Eastern Cape, nine in Free State, one in Limpopo, four in North West and five in the Northern Cape – which collectively defaulted on payments totalling R2 971 258 436.14.
In the Eastern Cape, Dr Beyers Naude Municipality did not pay over 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, which defaulted 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 and the Northern Cape has Kamiesberg R1 344 042, Renosterberg R5 274 175.62, !Kai! Garib R5 436 667.35, !Kheis R9 123 276.57 and Magareng R1 360 000.
The North West provinces 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