DA PRESSES CHARGES AGAINST KOUGA MUNICIPALITY

The Democratic Alliance (DA) in Kouga pressed charges at the Port Elizabeth Commercial Crime Unit on Monday, 7 May 2012 against officials of Kouga Municipality for the alleged non-payment of pension fund contributions to the three pension funds as prescribed by law. It is alleged that Kouga owes substantial amounts to the three pensions funds to which its employees subscribe.

It is in contravention with the Pension Funds Act not to pay over the employee contributions on a monthly basis. The responsibilities of the chief financial officer (CFO) and the municipal manager as the accounting officer of the municipality are to abide by the Municipal Finance Management Act (MFMA) and such non-payment could lead to an investigation of financial misconduct.

In addition, reneging on the statutory commitments is extremely serious and the auditor general must also be informed of the circumstances.

The gravity of the outstanding amount, believed to be well in excess of R6 million, has been hidden from the finance portfolio committee as well as from the Kouga Council.  The Prevention and Combating of Corrupt Activities Act prescribes that if one does not disclose such serious activities, one could be considered an accomplice in such case.

DA Cllr Ben Rheeder, who has been a trustee since 2000 of the EC108 Provident Fund for the employees from Humansdorp and St Francis Bay, first noticed the irregularities of pension contributions being deducted, but not paid over to the fund in May 2011.  Since then he has had a continuous battle to get Kouga to pay on time.  When these contributions are not being made within the seven days after the prescribed period the member or worker loses out on the interest of the size of his retirement or pension fund.  Furthermore, employees can also lose out on benefits such a disability and normal group insurance.

As trustee, Cllr Rheeder is obliged to disclose the non-payments under the Pension Funds Act, the Prevention and Combating of Corrupt Activities Act as well as the MFMA or he could be considered an accomplice.

The DA has been working on this for some time and is most concerned about the effect it (non-payment of contributions) could have on the benefits of the workers.  There is a very good chance that disability claims could be rejected if municipalities like Kouga are in arrears with pension fund contributions.  The DA will leave no stone unturned to protect the rights of the workers.

Statement issued by Elza van Lingen MP, DA Leader in the National Council of Provinces, Democratic Alliance Eastern Cape, May 7 2012

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