The Economic Freedom Fighters (EFF) has asked National Assembly Speaker Thoko Didiza to establish an Ad-Hoc Committee to investigate non-compliance with Section 13A of the Pension Funds Act by private security companies and local government municipalities.

In a letter addressed to Didiza the party highlighted that the Ad-Hoc Committee should comprise members from finance, law enforcement and labour committees.

“This multi-departmental constituting of the Ad-Hoc Committee, takes into consideration that the matter affects numerous spheres of governance, and each sphere has a number of issues to deal with, and one committee may not have the necessary time or human resource to give the matter the required attention,” said EFF Parliamentary Chief Whip Marshall Dlamini.

The party noted the call by Pension Funds Adjudicator Muvhango Lukhaimane, for workers across the country to check whether there is money in their respective pension funds.

The EFF claimed that many of these funds are empty owing to non-compliance with Section 13A of the Pension Funds Act.

Dlamini pointed out that according to the Financial Sector Conduct Authority (FSCA), 2 224 private security companies and 172 municipalities have failed to adhere to their statutory obligations with regards to payments towards pension, health and provident funds.

He said the call from Lukhaimane came during a “crisis” as workers realise that their pensions have not been paid over by employers when they make withdrawals in line with the newly introduced 'two-pot' system.

The EFF, in January, following a report by the FSCA, raised concerns that certain institutions, particularly local government municipalities and private security companies, are in arrears on their pension fund contributions.

“It is this same EFF that raised this concern with the Minister of Finance that municipal pension funds were in arrears to the tune of R1-billion, and the Private Sector Security Provident Fund (PSSPF) and other private security pension funds are in arrears to the tune of R6-billion,” the party said.

Dlamini said the Minister of Finance and the National Treasury had “ignored” the EFF for over eight months, and said now the Pensions Fund Adjudicator has “rung the alarm when it is too late”.

The EFF is of the view that the signing of the Revenue Laws Amendment Bill of 2023 had exposed that pension funds of workers had been looted, arguing that the new two-pot system had created a scenario that resembles mass-resignations and mass-retirements, as millions of workers try to access their pensions for withdrawal purposes, all at the same time.

These funds are practically empty, the party stated.

“Should the reports by the FSCA prove to be correct, then millions of employees within the private security sector and within local government municipalities will encounter challenges when it comes to withdrawing portions of their pensions using the two-pot system, because the funds are simply not there, because employers have not paid them,” said Dlamini.