More than 160 employees at Emfuleni local municipality, west of Johannesburg, have lodged complaints with the office of the Pension Funds Adjudicator (PFA) and the SA Municipal Workers Union (Samwu), following difficulties in accessing the savings portion of their pensions.
Bongiwe Nangaleba, executive secretary to Emfuleni’s finance and revenue member of the mayoral committee (MMC) Robert Thema, said workers who had applied for the two-pot withdrawals as early as September 3 had not received any communication or withdrawals from the Municipal Workers Retirement Fund (MWRF).
Changes to retirement fund legislation on September 1 enables workers to access a portion of their retirement savings before retirement. More than R35bn has been withdrawn from pension funds under the so-called two-pot system, according to the SA Revenue Service (Sars).
Nangaleba, who is part of a task team representing the disgruntled employees, said workers were “disappointed with the general administration of the fund and all of us want one thing and one thing only, to be able to migrate to other funds and we’ve been told that unfortunately there is a moratorium against migrating from one fund to another”.
“We are frustrated and scared and it seems like we have nowhere to go. We communicated with members from both Metsimaholo [local municipality in the Free State] and Sedibeng district municipality, who also feel exactly the same way. We also are frustrated with Samwu because we feel that they are not doing anything to assist us,” Nangaleba said.
The saga has raised tension between Samwu general secretary Dumisane Magagula and MWRF principal officer Themba Mfeka. That is after Magagula told Business Day on Monday that Samwu was having difficulty getting answers from the fund and that it was not processing workers’ applications to access their savings. He also said the fund was not operating from its Auckland Park offices and maybe “they are avoiding our members”.
On Tuesday, Mfeka accused Magagula of “lying”, saying the “real reason” for the allegations is because “the fund has refused to adhere to their sponsorship request of R13.8m”.
The MWRF’s Naledi Ntanyana has said more than 6,000 applications for savings withdrawals had been received to date and more than 2,500 of those applications, valued at more than R78m, had been paid out.
But on Wednesday Nangaleba told Business Day: “We are the most frustrated. People who applied as early September 3 haven’t been paid. [The MWRF] are very slow. We are also frustrated with how Samwu is dealing with this matter.”
Emfuleni employee Matthew Moisi said: “It looks like the fund has ‘eaten’ our money because they are taking forever to pay us. I applied in September and till today I have not received anything.” Moisi’s colleague Mcebisi Tsala was also in the same predicament.
However, another employee, Dimakatso Dipale, said: “I applied in September and I only got my money during the first week of November. The communication [from the fund] is bad because I did not receive any SMS to say they are processing my application. I only received my money through my bank recently.”
In a complaint to the pension funds adjudicator, which Business Day has seen, the disgruntled employees stated they were concerned by the lack of updates by the fund regarding their two-pot applications, how they were frustrated and had lost trust in the fund’s ability to serve its members.
SA Local Government Association (Salga) dispute resolution senior advisor, Themba Nxumalo, who is among officials apprised of the matter, wrote in an email dated October 16: “Many employees across municipal pension funds are experiencing a similar challenge, especially when it comes to accessing the two-pot benefit. This, however, is a matter between the employee and his/her pension fund.
“All that the employer, the municipality in this case [can do] is to enquire, and unfortunately it ends there. Queries between the fund and the employee are outside the employer’s jurisdiction.” Salga is an employer body representing the country’s 257 municipalities.
Office of the PFA administrator Sibongile Mbatha, responding to Nangaleba’s complaint of November 12, wrote: “Based on enquiries made by our office, we have ascertained that the complaint was not lodged with the fund prior to same being lodged with our office.
“We have, accordingly, lodged the complaint with the fund on your behalf in order to allow the fund an opportunity to resolve the complaint directly with you. Should the fund fail to provide our office with such information, we will consider the complaint as unresolved and our office will proceed to investigate the complaint."
Business Times reported in October that the Pension Funds Adjudcator, Muvhango Lukhaimane, said about 80% of the complaints received related to employers not paying retirement fund contributions to fund management firms.
The pension funds adjudicator’s office fielded 9,719 complaints in 2023/2024, with 6,890 of those concerning nonpayment of retirement fund contributions by employers.
Meanwhile, municipalities took more than R1.4bn from workers in pension fund deductions but failed to pay the MWRF, TimesLIVE reported, citing finance minister Enoch Godongwana.
The minister disclosed the information in parliament this week. Godongwana said just 108 of the country’s 257 municipalities were compliant and had paid workers’ pensions by March 31.
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