The Grahamstown high court has ordered the Great Kei municipality to account to the Municipal Workers’ Retirement Fund for six years worth of deductions from employees and subsequent contributions the municipality should have made to the fund.
The fund’s risk management and compliance officer, Petunia Phakathi, says in court papers the municipality, whose staff were members of the fund, had failed to furnish it with the information required by pension fund regulations or to pay outstanding contributions to the fund.
It wants the municipality to account to the fund in terms of the law so that it can ensure the correct amount of money has been paid to the fund on behalf of its members from whose salaries the deductions had been made.
It reserved the right to return to court to compel payment of any outstanding money.
“The fund requires the information sought in the first part of the application to calculate the amount of arrear contributions owed by the municipality.”
She said the municipality had only made part payments over some six years.
“Despite multiple demands . . . the municipality has neglected and/ or refused to pay the outstanding contributions due to the fund. . .”
She said the fund was unable to determine how much was outstanding until the municipality had accounted to it as was required to do by law.
The municipality’s brazen failure to provide the required information prejudiced both the fund and its members.
“Should a member employed by the municipality resign, be retrenched or retire while the information on that member remains outstanding, the benefit payable by the fund to that member is impossible to determine.
“The fund has no idea at what rate the member had been contributing, which changes have been made to his pensionable salary or which deductions should have been made for administration costs.”
The court last week gave the municipality 10 working days to provide the information.
Attorney Mark Nettelton is acting for the fund.
The fund has repeatedly had to resort to court over the years in the face of recalcitrant municipalities which either fail to deduct the correct amounts from their employees’ salaries or fail to pay over the full deduction to the fund.
Late last year the Grahamstown high court ordered Ndlambe municipality to pay over more than R13m to the fund after it shortchanged it for six years between 2007 and 2013.
These are the same years the fund is asking the Great Kei municipality to account to it for.
In terms of the fund rules, employer municipalities are required to pay over all members’ contributions deducted from their salaries as well as the contribution from the employer itself within seven days of the end of the month.
Ndlambe admitted that between 2007 and 2013 it had failed to pay over the full monthly amount due both in terms of members’ contributions and its own contribution.
It had shortchanged the fund to the tune of R1.15m for members’ contributions and about R2.78m for its own contributions...