Betrayed workers demand answers as savings disappear
Picture: iStock
After 40 years of service to a Mpumalanga municipality, a 60‑year‑old line manager now fears retirement may bring ruin instead of deserved rest.
His worry is simple but devastating: the council has failed to pay over millions in employer and employee pension contributions, leaving him – and thousands of other municipal workers – uncertain of their futures.
Municipalities owe R1.7 billion in unpaid pensions
Finance Minister Enoch Godongwana recently confirmed municipalities nationwide have withheld more than R1.7 billion in deductions, exposing workers to a bleak retirement and raising urgent questions about accountability, governance and justice.
The National Treasury has recently refused to release the July equitable share transfers allocated to 69 municipalities after they failed to comply with the Municipal Finance Management Act and other related laws.
Retirement contributions disappeared
The municipal employee said he believed thousands of rands had been deducted from his salary over two years and not paid over to the retirement fund. He was not sure whether the employer contributions had similarly disappeared.
“Most of my former colleagues who already retired did not get enough money and they are challenging the municipality to have the matter investigated.”
The employee said he approached the pension fund adjudicator for assistance, and the municipality was requested to submit the supporting documents detailing why the money was not transferred.
“It’s about a month now; we are still waiting for them to give details of why the money was not transferred,” he said. “I am one of the employees who used to work for the apartheid government, and we were told that the money would be transferred to the democratic government. But by the look of things, something went wrong because some of my former colleagues did not receive what they were due.
“Before retiring, I need to make sure that the issue of the missed contributions for two years is sorted out and also double-check whether the municipality would be able to pay me all that is due to me.”
A 72-year-old granny, who had worked at the financial department of the government from 1985 until 2019, said after retiring, she was only paid R600 000 and a monthly stipend of about R10 000.
“Most of the former longest-serving employees only received less than R1 million, mostly about R500 000,” she said. “We are not happy, and some of us reported the matter to our former unions to investigate.”
One of the secretaries at the same municipality said she has only 10 years of service, but her pension fund is about R700 000.
“If I am at that figure now, why does a person who started working here when I was only three years old receive the same amount as mine when they retire?”
Call for municipal managers to be charged
Cosatu parliamentary coordinator Matthew Parks said what happened to the workers was an abomination.
Parks said municipal managers were guilty of committing serious criminal offences and must be charged and held personally financially liable.
“Until we begin charging managers and employers for stealing workers’ pension funds, this mass theft will continue unabated,” he said. “Cosatu remains extremely concerned by the lack of a comprehensive package of interventions to stabilise and rebuild the alarming number of financially distressed municipalities.”
Parks said the federation notes tentative progress with 42 delinquent municipalities responding to National Treasury’s temporary withholding of their equitable share grants and the staggered release of these payments to them.
“The absence of plans to respond to Treasury’s call for actions from the remaining 17 municipalities is staggering,” he said. “Equally worrying is the seemingly pedestrian approach from the South African Local Government Association to the deterioration of municipal governance and even the collapse of basic services in countless municipalities under its lacklustre watch.”
He added that Cosatu appreciated the need to instil financial discipline in these errant municipalities, in particular to ensure that they honour their payment obligations to workers’ salaries and pension funds, Eskom, water boards and other third parties.
“We are, however, deeply worried about the unintended potential consequences of withholding payments to municipalities, with 21 of them so financially cash-strapped that this action may cause some basic services to grind to a halt and leave many municipal workers unpaid once again.”
