SOUTH AFRICA - The South African Local Government Authority's (SALGA) attempt to push various municipal workers' benefits into a newly-created fund may have been impeded after they allegedly failed to register the fund.
SALGA had earlier sent a directive to municipalities and municipal staff to join the fund, dubbed the Local Government Pension Fund (LGPF), to which a number of workers union’s responded by threats of legal action and strikes.
But it now seems SALGA failed to register the LGPF as required by the Pension Fund Act, and opposition party Democratic Alliance (DA) has subsequently taken the issue to the South African Police Service and today laid charges against SALGA.
The head of pensions for the Financial Services Board confirmed the fund had not been registered by 30 May 2006 - three weeks after SALGA had issued a circular to all municipalities claiming the fund was registered.
The circular, signed by the SALGA CEO Makhosi Khoza issued certain directives to municipalities including that membership of the new fund was compulsory and that, in respect of existing employees without any fund membership, employment conditions had to be amended to include a clause of compulsory membership of the fund with effect from 1 June 2006.
DA provincial and local government spokesman Willem Doman said: “Aside from the questionable legality of the directive, the circular issued by SALGA shows contempt for the South African Local Government Bargaining Council’s (SALGBC) resolution to place a moratorium on the registration of new pension funds.
“SALGA has also reneged on its undertaking that no new fund would be introduced until the pension fund arbitration dispute declared within the SALGBC has been resolved.”
Doman added that, rather than ensuring stability in local government, SALGA’s approach had a destabilising effect.
“The resulting low morale among employees, the potential flight of skilled employees from the sector as well as looming labour unrest can only further weaken local government’s ability to deliver services. Ultimately, it is the South African citizens who will suffer.”
SALGA was not immediately available for comment, but reports claim they have rebuked the allegations as “a blatant lie”.
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