The EFF has written to the Speaker of the National Assembly, Thoko Didiza, requesting Parliament to establish an Ad Hoc committee to investigate the theft of R7 billion of workers’ pension funds by some companies operating in the private security sector as well as municipalities.
Media reports this week have suggested that some companies, including municipalities, have not been paying worker pension funds.
According to the Financial Sector Conduct Authority (FSCA), over 3 000 private security companies and municipalities have unlawfully withheld pension and provident fund contributions for more than 240 months.
This is as some workers have been prejudiced from claiming their savings portion of the two-pot retirement system, which came into effect on September 1.
EFF MP Sinawo Thambo said this matter was of serious urgency, considering the legislation that has been passed known as the Revenue Laws Amendment Bill of 2023, popularly known as the “two-pot system”, which allows for retirement funds to be accessed by members, without having to resign or cash-out their entire pension funds.
He said, if this was true, millions of employees would encounter challenges when it came to withdrawing portions of their pensions using the two-pot system, because the funds were simply not there, because employers had not paid them.
In a letter to the Speaker by the office of the secretary-general, the Red Berets called for the establishment of an ad hoc committee to address this matter.
“We wish to bring to your attention to the ongoing crisis relating to the violation of Section 13A of the Pension Fund’s Act, in accordance with two reports published by the Financial Sector Conduct Authority (FSCA).
“According to the FSCA, there are 2 224 private security companies and 172 municipalities that have failed to adhere to their statutory obligations with regards to payments towards pension, health and provident funds. These companies, and alarmingly, municipalities have been making statutory deductions from the salaries of workers, and not paying them forward to to the relevant funds for periods ranging from six to 240 months,” the party wrote to the Speaker.
It is reported that these private companies and municipalities owe anything between R1 billion and R6 billion.
“Of particular concern is, is whether municipalities, government departments and/or state-owned enterprises are contracting private security companies which are in violation of Section 13A of the Pension Funds Act,” the party said.
Early this year, ActionSA slammed the Great North Transport bus company belonging to the Limpopo Provincial Government, which had failed to pay more than R300 million to more than 800 current and former employees who were left high and dry by non-payment.
The party wrote to the Hawks Special Investigation Unit in a bid to get to the bottom of the matter.
The Star