Cracks are widening between SA’s largest union in the local government sector and the Municipal Workers Retirement Fund (MWRF), after a meeting called to iron out issues was cut short as it was not “helpful”.
The national office bearers (NOBs) of the SA Municipal Workers Union (Samwu), which represents more than 160,000 of the country’s estimated 300,000 municipal employees, held a meeting with MWRF bosses earlier this month.
The parties have locked horns over the two-pot retirement system, with Samwu accusing the fund of dragging its feet in processing its members applications to access a portion of their retirement savings.
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 More than R35bn has been withdrawn from pension funds under the so-called two-pot system, according to the SA Revenue Service (Sars).
The saga has raised tension between Samwu general secretary Dumisane Magagula and MWRF principal officer Themba Mfeka. That is after Magagula told Business Day last week that Samwu was having difficulty getting answers from the fund and it was not processing workers’ applications to acquire their savings. He also said the fund was not operating from its Auckland Park offices and maybe “they are avoiding our members”.
Mfeka responded by accusing 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 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.
In a recording of the meeting, Magagula pleaded for the meeting to continue, urging MWRF bosses to “allow us to present our issues, let’s take this opportunity to assist each other in handling matters going forward. It’s not only around issues of two-pot. We have tried to send a briefing on what our issues would be, so that following this we are able to communicate largely in the union”.
But the fund’s Radithobane Thebehadi was reluctant, saying: “I don’t think this meeting will be of any assistance because we are of the fact that the issue here is the two-pot system of which it’s something we are busy working on. The meeting won’t assist any process of the two-pot system. We are handling the matter and I think by having this type of a meeting, it took [time away] for our administrative people to proceed [with processing the applications].”
Another official from the fund, Mteteleli Ndamase, criticised the NOBs for being lenient towards Samwu members, even when they were behaving badly, saying: “Our NOBs have a soft spot for our members who are invading the fund’s offices. I don’t think the meeting will address any issues until our union is bold and strong and stop those ill-disciplined members who are marching to our fund offices to make the chaos there. This meeting won’t address anything. I appeal let’s stop this meeting until the environment is conducive.”
Magagula retorted: “We are using our own internal processes to deal with our members.”
The Samwu general secretary said there was still a need for the Samwu and MWRF leadership to speak to each other.
“If, indeed, the fund still wants to remain in [the] fund [business], Samwu supports [that], but if the fund feels like they are enough with Samwu, [then] let it be!” The meeting was summarily ended.
Business Times reported in October the Pension Funds Adjudicator, 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 2023/24, 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, 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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