The Johannesburg High Court on Thursday ordered the Johannesburg City Council to pay at least R130-million in arrears to two pension funds, a legal firm said.
A spokesperson for Routledge Modise Moss Morris attorneys, Peter van Niekerk, said in a statement that the city council had an agreement with the Johannesburg Municipal Pension Fund and the City of Johannesburg Pension Fund to pay, among others, a 13th cheque to their members.
In 1999, the city council stopped paying the 13th-cheque benefit, which meant that the pension funds could not pay that to employees of the council and pensioners. This hit especially the pensioners very hard, he said.
”The Johannesburg Municipal Pension Fund and the City of Johannesburg Pension Fund instructed us to sue the city council for breach of its contractual obligations,” Van Niekerk said.
”The city council’s defences were, inter alia, that no agreements had been entered into, but if they had been, they had been cancelled.”
The high court found that the agreements were valid and ”of full force and effect”, and ordered the council to pay benefits in arrears.
This amount is estimated at between R120-million and R130-million.
Including future payments, the judgement is estimated to be close to R1-billion, plus legal costs, Van Niekerk said.
”This must be one of the biggest pension fund cases this country has ever seen.” — Sapa