More than 3 000 councillors who were not re-elected or did not stand during the 2021 local government elections shared R1.425 billion, the Municipal Councillors Pension Fund’s (MCPF’s) curators have revealed.
The MCPF was placed under curatorship by the Gauteng High Court, Pretoria, in 2017 after a successful application by the Financial Sector Conduct Authority following years of widespread irregularities.
According to the latest report filed in court by joint curators Juanito Damons and Sophie Kekana on October 31, there were 3 430 councillors who were not re-elected in the 2021 municipal polls and the fund has so far paid 3 053 of these.
”The monetary amount paid out to 3 053 members is a total of R1 424 953 439.55,” states the report.
The MCPF currently has nearly 4 000 members after just under 2 100 councillors in 111 municipalities joined the fund after the 2021 elections.
In their report, Damons and Kekana also raised concerns about the failure of 34 municipalities across the country to pay the contributions of 117 councillors in contravention of the MCPF’s rules and the Pension Funds Act (PFA).
The act states that employers (municipalities) whose employees are members of retirement funds must pay contributions and submit minimum information relating to the payments to retirement funds within the prescribed timelines.
However, Damons and Kekana reported that they have briefed MC Inc. Attorneys to initiate referral against the municipalities to the Office of the Pension Funds Adjudicator due to ongoing non-compliance with the act.
”Every month letters are sent to the municipalities and members who are in contravention of the rules of the MCPF and the PFA,” explained Damons and Kekana, adding that they communicate with each member indicating whether or not their contributions have been received.
In addition, MC Inc. Attorneys is targeting six Free State municipalities with complaints to the adjudicator after the curators decided to adopt a “province by province” approach to dealing with the matter.
The curators have also informed the court that the time has arrived for a section 13B administrator to be appointed at the MCPF and that this should be finalised by the end of this year as nominations for the position ended on October 31.
Section 13B of the PFA makes provision that no person be allowed to administer on behalf of a pension fund the receipt of contributions or the disposition of benefits provided for in a fund’s rules unless such a person has been approved by the registrar and continuously complies with prescribed conditions.
Damons and Kekana also indicated that the process of appointing new trustees is under way and will be finalised by the end of January next year.
”… We intend having the administration of the MCPF placed on open tender process and to invite section 13B administrators to make proposals on how best (they) intend to administer the MCPF,” they added.
On the number of irregularities that led to the MCPF being placed under curatorship, Damons and Kekana said these have been attended to over the six years that the fund has been under their control and that they have since been remedied.
”To the extent that some of the irregularities may exist, they are of such a nature that it does not justify keeping the MCPF under curatorship but in any event, it may be addressed by the new board,” the curators told the court.
The Star