THE Ntabankulu Local Municipality in the Eastern Cape wants the Municipal Employees Pension Fund (MEPF) to pay back over R5.1 million in a dispute involving more than 100 members of staff.
The municipality had earlier hauled the MEPF to the South Gauteng High Court demanding payment of R5.1m, which is the purported value of the pension contributions allegedly due to it from the pension fund.
In addition, the municipality wanted all investment returns and the purported pension contributions paid by the municipality to the pension fund between September 2018 and the end of June 2020. The municipality wants the interest on the aforesaid amount at the legally prescribed rate from March 29, 2019, alternatively from the date of the order to the date of payment.
Judge Maletsatsi Mahalelo has previously dismissed the MEPF’s bid to overturn a September 2022 judgment, which is centred around the default judgment which was granted against the pension fund wherein it was ordered to pay to the municipality.
The legal battle dates as far back as 2013 when 101 of the municipality’s employees left the SA Municipal Workers Union (Samwu) national provident fund and joined the MEPF.
The municipality continued to pay monthly pension contributions of these members to the MEPF in accordance with the Pension Fund Act.
In February 2015, Samwu instituted legal proceedings against the municipality in the Eastern Cape High Court in Mthatha to compel it to pay the pension contributions with interest for the 101 employees from the date 1 September 2013 to date of the proceedings.
The union argued that the 101 employees were not permitted in terms of the rules of the Samwu National Provident Fund to terminate their membership while they remain in the municipality’s employ.
In August 2018, the high court ordered the municipality, MEPF and its administrator Akani to pay the Samwu National Provident Fund all area pension contributions in respect of their 101 employees and any interest accrued.
The MEPF and Akani later approached the Supreme Court of Appeal (SCA), which ordered that only the municipality should pay the Samwu National Provident Fund all the arrear pension contributions in respect of the 101 employees.
Judge Mahalelo found that there appears to be a difference in the interpretation of the SCA judgment between MEPF and the municipality.
The MEPF paid the total pension contributions and the accrued interest in respect of 71 out of 101 members to the municipality.
The MEPF maintains that it did this without any legal obligation to do so and only acted in good faith.
The refund paid by the MEPF amounted to nearly R20m but the municipality later instituted further legal action proceedings against the pension fund claiming an additional amount of R5.1m and interest.
The municipality insisted that as a result of the SCA judgement, the MEPF was due to refund it a total amount of just over R25m in respect of the area pension contributions and not the almost R20m, which was paid to it.
In 2023, the MEPF launched legal action to rescind the judgment ordering it to pay the additional R5.1m.
Last Wednesday, Judge Mahalelo granted the MEPF its application for leave to appeal to return to the SCA to rescind the judgment ordering it to pay R5.1m.
The municipality opposed the application and submitted that the grounds of appeal raised by the MEPT were meritless and should be rejected by the high court.