Call for municipal officials to be liable for R1.7bn pension shortfall

The Motor Industry Staff Association (Misa) has called for municipal managers, mayors and councillors to be held personally liable for R1.7bn in unpaid pension contributions owed by municipalities.

In a statement on Monday, the union said municipalities had deducted pension contributions from employees’ salaries but failed to pay the money into their pension and provident funds, describing the practice as theft from workers.

Misa’s call follows findings by the Financial Sector Conduct Authority (FSCA), which identified municipalities and employers in the retail motor industry among the biggest offenders in failing to pay pension contributions as required by section 13A of the Pension Funds Act.

According to the FSCA, more than 16,000 employers have contravened the law, with unpaid pension contributions amounting to R8.3bn. Misa said municipalities accounted for R1.7bn of the outstanding amount.

Misa chief executive for operations Martlé Keyter said employers who withheld pension contributions were personally liable under FSCA rulings and that the same principle should apply to municipal officials.

“This is fraud. Workers are being robbed of their retirement security while corrupt officials walk free. Under FSCA rulings, employers who pocket pension money are personally liable. Municipal managers and political leaders must face the same consequences. Heads must roll because accountability can no longer be delayed,” said Keyter.

Misa said the failure to pay pension contributions had deepened the crisis of trust in local government and reflected broader governance failures that have left many municipalities struggling to provide reliable electricity, water and other basic services.

The union called for urgent investigations, prosecutions and consequence management, saying pension contributions were both a legal and moral obligation.

It also urged law enforcement agencies to treat the non-payment of pension contributions as criminal theft and to hold municipal managers and political leaders personally accountable where workers retirement savings had not been paid over.

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