The SA Municipal Workers Union (Samwu), the largest trade union in the local government sector, has expressed concern about a retirement fund’s alleged failure to process workers’ applications to access a portion of their retirement savings in the two-pot retirement system.
Samwu general secretary Dumisane Magagula said the union was having difficulty getting answers from the Municipal Workers’ Retirement Fund.
“The challenge is that when the two-pot system started, we received a number of queries nationwide from municipalities. Workers were saying they had applied to access a portion of their savings from the two-pot system but the retirement fund was not processing their applications,” Magagula said.
“The biggest challenge is that [the fund] is not communicating the causes for the delays.”
When the two-pot system went live on September 1, the retirement savings of each working South African were separated into two pots — a savings pot and a retirement pot.
The SA Revenue Service has said that since September 1, it had received a total of 161,607 tax directive applications, 159,853, or 98.9%, of which relate to savings withdrawal benefits, at an average of 17,964 tax directive applications a day. The gross amount involved in these applications was R4.1bn.
Magagula said the union had received queries from its members in the Ekurhuleni, Sedibeng, Mangaung and Matjhabeng local councils, among others. Disgruntled municipal workers recently visited the retirement fund’s offices in Auckland Park, “but the offices were closed, only security guards were on site”.
A contact number listed on the Municipal Workers Retirement Fund’s website does not work. When Business Day visited the fund’s offices at Napier Road in Auckland Park on Monday, the building looked abandoned. A lone security guard staffing the garage entrance said: “There is no-one here. If you are here about the two-pot issue, I will give you a slip with some contact details.”
The piece of paper showed the same telephone that does not work. It also had an email address of a “Tinyiko”.
The security guard said: “A group of angry workers in Toyota Quantum minibus taxis came here to inquire about their two-pot applications. They were angry. Because there was no-one to help them, they left.”
‘Pension fund adjudicator’
Magagula said: “The fund is not operating from their offices, we don’t know whether they are avoiding our members. We have been trying to meet the principal officer of the fund and the board chair since September”, adding that a meeting held by parties last week was not fruitful.
“We have started a process of going to the pension fund adjudicator to assist our members to lodge complaints against the fund. That process will take its own time, but that’s where we are at the moment,” he said.
Responding to questions from Business Day, the Municipal Workers’ Retirement Fund’s Naledi Ntanyana said it was not true the fund was not processing applications. “The office is not abandoned. As we speak, applications are being processed.”
She said to date more than 6,000 applications had been received. Of the number, more than 2,500 applications valued at more than R78m had been paid out.
Business Times reported in October that the pension funds adjudicator, advocate Muvhango Lukhaimane, said about 80% of the complaints received related to some employers not paying retirement fund contributions from employees to fund management firms.
The pension funds adjudicator’s office fielded 9,719 complaints in 2023/24, with 6,890 of those concerning nonpayment of retirement fund contributions by employers.
Update: November 18 2024
This article has been updated with comment from the Municipal Workers’ Retirement Fund.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.