The South African Municipal Workers’ Union is to probe reports that thousands of retired local authority employees have had their pension pay-outs reduced by 12% per month, the union said on Tuesday.
If true, this is just the latest in a series of worrying developments at the Joint Municipal Pension Fund, the union’s collective bargaining officer, Dale Forbes, said.
”We have some serious concerns with that fund,” he said. ”Last year, it lost about R1,4-billion on the futures exchange, and more recently questions were raised about lavish packages paid to the board of trustees.”
The union will investigate whether these developments have had any impact on the fund’s financial viability and its reported decision to reduce its members’ monthly pensions from November 1.
If any wrongdoing is found, the fund will be reported to the registrar of pension funds, Forbes said. The union will then also move for the its deregistration from the local government bargaining council’s list of authorised funds.
Beeld newspaper reported on Tuesday that about 4 000 members of the fund were informed of the changes in a letter dated November 26 — one day after the first payment of the reduced pensions. They are all retired employees of municipalities in the former Transvaal.
The pensioners were informed that the cut has been necessitated by an invalid 12% increase, which came into effect in March last year.
Also, they will have to pay back money received as a result of that — with interest of 8% a year, the letter reportedly stated.
The fund’s chief executive officer, Hettie Joubert, said: ”We have no comment on this matter.”
The fund lost more than R1-billion last year trading in maize futures on the South African Futures Exchange. This loss was reportedly more than a third of its R3,5-billion in assets.
A tribunal of the JSE Securities Exchange subsequently found that futures brokerage WJ Morgan had defrauded the fund — causing its loss.
In October, it was reported that the Financial Services Board (FSB) was investigating alleged criminal actions by the fund’s trustees. The FSB said it was concerned that some fund members might have taken kickbacks from WJ Morgan.
The FSB tried to place the fund under curatorship, but the application was turned down by the Pretoria High Court in September. The FSB intends appealing against that decision. — Sapa