Bongisizwe Mpondo, the Administrator of the Passenger Rail Agency of South Africa (Prasa), could face more criminal charges for contraventions of the Public Finance Management Act (PFMA).
Peet Maritz, Principal Officer of the Transnet Retirement Fund (TRF), warned Mpondo yesterday that the Administrator, in his capacity as the accounting authority of Prasa, must immediately ensure payment of the unpaid R23 million in contributions of 2 382 employees to the TRF and the interest on the amount.
“The Fund has not received payment; its representatives are not able to attend meetings and the Fund is not in a position to make loans to or financial arrangements with employer companies.
“The trustees have an obligation to institute legal proceedings to recover these amounts and I am authorised to do so on behalf of the TRF.
“Ongoing non-payment will have the implications under the Public Finance Management Act for public entities that fail to meet their commitments in respect of pensions. These include the sanctions imposed on the accounting authority under the Public Finance Management Act in circumstances where a public entity fails to meet its pension commitments,” Maritz informed Mpondo in writing. Currently the affected members death and disability benefits of the TRF are suspended.
The risk benefit of TRF members are the amounts that will be paid to the dependants of an employee upon that employee’s untimely death or to the employee on disability of the employee. These risk benefits are fully insured by the TRF.
The amounts that are received by the TRF from PRASA are paid over to an insurer as a premium on a policy held by the TRF for the benefit of the employees. If an employee dies or is disabled, the TRF pays the amount received under the policy from the insurer to the employee.
If no amount is received from the insurer, the TRF has no obligation or ability to provide the death or disability benefits to the employee. The obligation of the insurer to provide a benefit in respect of an employee is subject to the receipt by the insurer of the premiums in respect of that employee.
“The effect of all of these arrangements is that unpaid contributions will have the effect of denying PRASA’s employees their death and disability benefits. In addition, PRASA’s employees will not have the retirement savings to which they are entitled.
“Unlike private sector pension funds and certain public sector pension funds, the TRF is not directly governed by the Pension Funds Act. Rather, it is governed by the Transnet Pension Fund Act and its rules. The rules have the force of legislation. Its governance is overseen by a board of trustees. All the participating employers in the TRF are public entities that are subject to the Public Finance Management Act,” Maritz explained.
Steve Harris, General Secretary of the United National Transport Union (UNTU), says the letter send by Maritz to Mpondo confirms UNTU statements against the state-owned enterprise.
“PRASA in its response to the criminal charges of fraud, theft and contraventions of the Transnet Pension Fund Act the Union laid against the Administrator and Prasa, mislead the public by not admitting that the pension fund contributions is included in the total cost of employment of PRASA employees.
“PRASA also did not mention that it had deducted the pension fund contributions from the salaries of employees to be paid to the TRF as indicated on the payslips of its Employees. It is unlawful for any Employer to deduct money from the salary of an employee for a specific purpose, but to utilise it to subsidise its cashflow problems as PRASA explained,” Harris says.
UNTU also submitted formal complaints to the Minister of Public Enterprises Pravin Gordhan to whom the Transnet Retirement Fund Account, the Minister of Transport Fikile Mbalula to whom Mpondo and PRASA accounts, Pension Funds Adjudicator Muvhango Lukhaimane and Advocate Shamila Batohi, National Director of Public Prosecutions (NDPP) to take immediate action to ensure that the R23 million is transferred to the funds.
UNTU is in the process of checking each of the other deductions PRASA made from the salaries of its employees to check if it was used for the purpose of the deduction.
Issued on behalf of UNTU by Sonja Carstens, Deputy-General Secretary: Media, Liaison and Communication. For UNTU Press releases phone 082 463 6806 or e-mail firstname.lastname@example.org.