Documents seen by OFM News reveal it’s among several struggling Free State municipalities that have fallen behind on third-party payments. A letter from the municipal workers’ retirement fund, dated 30 June, shows the municipality owed R3,175,468.98 in outstanding retirement fund contributions. 

The amount comprises R3,090,516 in unpaid contributions and R84,952.98 in accumulated late payment interest.

A warning was issued on 8 June by the municipal employees’ pension fund, in which the municipality, which serves Ladybrand, Hobhouse, and Excelsior, was instructed to pay R209,413.94 in May retirement fund contributions within seven days. Failure to do so would result in additional late payment interest of R16,138.42.

The retirement fund warned continued non-payment could have severe legal and financial consequences, including reporting the municipality to the Financial Sector Conduct Authority, the imposition of penalties, possible imprisonment of responsible parties, and liability for investment losses suffered by employees. Workers also face the risk of their retirement and funeral benefits lapsing.

Speaking to OFM News, Mantsopa municipal shop steward Thebe Mahlomola said retirement fund contributions deducted from their salaries have not been paid over four consecutive months.

“On 7 July, we went to Ladybrand police station with members as per their mandate after the constituency meeting. We went to a police station to open a case, fortunate enough we are sharing the same case number with the National Fund for municipal workers, which is one of the pension funds within local governance.”

Mahlomola said the crisis has had devastating consequences for employees and their families. One employee, whose mother recently passed away, was allegedly informed the municipality would instead pay him by allowing him to cash in his accumulated leave because his funeral benefit could not be processed.

“The pension fund has made it clear it will never pay out that funeral claim because policies of all employees lapsed. We want to reach out so that tomorrow when the employees resort to anything they will feel to do, they will never be called names and disciplinary processes will be instituted against them,” he said.

Workers exhausted internal processes in an attempt to resolve the matter but without success, he added. They find themselves in an impossible position, with deductions having been made from their salaries while their retirement benefits remain at risk because of the municipality’s alleged failure to transfer the money. The matter has now escalated into a criminal investigation.

Free State Hawks spokesperson Lt. Col. Zweli Mohobeleli confirmed the matter has been transferred to the Directorate for Priority Crime Investigation. “We can confirm serious commercial crime investigation detectives of the Hawks are investigating allegations that Mantsopa municipality did not take workers’ pension contributions to the third parties. Fraud investigations are at an early stage.”

OFM News has contacted Mantsopa for comment.

In 2023, workers at Matjhabeng municipality, which serves the Goldfields, protested over unpaid third-party contributions, including provident funds and medical aid, with the municipality reportedly owing between R5m and R10m.

That same year, workers at Letsemeng in Koffiefontein shut down municipal offices, demanding answers over unpaid pension fund and medical aid contributions.

More recently, parliament’s standing committee on public accounts (Scopa) heard officials at Masilonyana in Theunissen were unable to account for approximately R75m owed to third parties for workers’ pension contributions, despite deductions having been made from employees’ salaries.

Committee members also heard allegations that municipal officials had awarded themselves bonuses ranging from R4,000 to more than R100,000 over two financial years while the municipality struggled to meet its obligations to pension funds.

OFM News/Kekeletso Mosebetsi dg

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