Mafube Municipality and officials to pay R14.7m to pension fund

A JUDGE had harsh words for the Mafube Local Municipality in the Free State and some of its senior officials, including the mayor, who have simply turned a deaf ear to court orders compelling them to pay the pension contributions of workers over to the pension fund.

In the latest of a series of judgments on the issue, the Bloemfontein High Court ordered the municipality, mayor Tloane Motsoeneng, the CFO and the municipal manager, to personally pay more than R14.7 million over to the Municipal Workers Retirement Fund.

Judge Mareena Opperman said the municipality and the officials are jointly and severally responsible for this amount, which will run interest come February 1.

She also ordered the registrar of the court to forward a copy of this judgment to the Free State Director of Public Prosecutions. The latter is directed to within 60 days deliver a written copy on the progress of the investigation.

Judge Opperman remarked that this is one in a series of cases that pertains to the municipality’s ongoing non-payment of contributions and noncompliance with court orders obtained by the fund dating back to 2011.

In one of the previous related cases, a judge remarked that “the disappearance of employees' and fund members' money remains questionable.”

In another related case, a judge remarked that “what the municipality is doing is too ghastly to contemplate”.

The period on which this specific claim is based is from May 2021 to January 2024. The debt comprises the municipality’s arrear monthly retirement contributions due to the fund in respect of its members.

The money was deducted from the employees-members. The municipality has not opposed the claim. The officials cited in the judgment as being liable for ensuring that the money is paid over were in office when the claim was instituted.

Although the municipality did not dispute the claim, the personal liability of the mentioned officials was challenged, as different officials served in that office during this time, and some served in an acting capacity.

Judge Opperman remarked that the municipality has become a faceless and untouchable perpetrator of the Pension Fund Act (PFA) to the detriment of the constitutional rights of the affected employees-members.

“It is common cause that the municipality has illegitimately evaded accountability for many years. The individuals comprising the governing body and that were regularly in control of the financial affairs have not been held legally liable and answerable to the neglect of their duties to pay the statutory imposed monthly retirement contributions to the fund,” the judge said.

She added that recent judgments in this division show that there had been some relentlessly and ruthlessly questionable conduct to avoid payment to the fund.

The fund has now, out of desperation, joined the officials to account for their actions.

In referring to the history of transgressions by the municipality, the judge said it would rather challenge each and every application brought to assist the pension fund members rather than pay its employees’ money to the fund.

Judge Opperman said neither the municipal officers nor the administrator can claim ignorance of the provisions of the Act and the fact that they shall be personally liable for not paying the retirement contributions and the injury it causes.

“They accepted the responsibility when they took office. The date of appointment and resignation is irrelevant to the liability. What is significant is that the respondents were in office at the time the claim was lodged,” she said.

She added that the conduct of the municipality and officials causes a malfunction of the rule of law.

“The consequences for the employees-members, that are innocent bystanders, are grave.”

“To order personal liability of the municipal officers and the administrator is necessary to even the scales of justice; there is not any other remedy that will suffice. Their conduct is criminal according to the PFA.”

Cape Times