Dear Member,
As promised, please find an additional update on the Brian Molefe pension matter. The EPPF will be issuing a letter of demand to Mr Molefe now that the Pretoria High Court has dismissed his leave to appeal application, with costs.
What do the Rules of the EPPF say about such matters?
In terms of the Rules of the Eskom Pension and Provident Fund, Eskom may make additional contributions to the Fund to enable an employee who is a Member of the Fund to take early retirement. It is in terms of these provisions that Eskom paid R30 103 916 to the Fund for Mr Molefe’s early retirement.
On retirement, a member may take up to a third of the retirement benefit as a lump sum. The balance is to be utilised to pay a monthly pension. To this effect, the Fund paid nearly R10-million to Mr Molefe, with the balance reserved to pay out a monthly pension.
When did the matter become a legal process?
The Pretoria High Court ordered on 4 July 2022 that Mr Molefe had to pay back benefits unlawfully received from the EPPF. The Fund took legal action against Mr Molefe to compel him to pay back the money in line with the original court judgment from 2018. Mr Molefe had unsuccessfully sought to appeal the 2018 judgment, eventually going to the Constitutional Court in 2019. The EPPF had also asked the High Court to determine and order how much needed to be repaid considering Mr Molefe’s own contributions to the Fund while he was an employee of Eskom, his accumulated retirement savings transferred to the EPPF from his previous employer, as well as the related tax implications and applicable interest.
What was the 4 July 2022 court ruling?
The Pretoria High Court judgment of 4 July 2022 deemed the payment of nearly R10-million unlawful and ruled that the additional amount of R30 103 916 paid by Eskom, along with contributions of R2 196 342 (made up of employer and employee contributions) received by the Fund during Mr Molefe’s employment with Eskom, be returned to Eskom with interest. At the same time, the Court ruled that Mr Molefe is required to repay the nearly R10-million to the Fund with interest.
Did the EPPF payback the money?
On 2 September 2022, the EPPF repaid the amount of R30 103 916 that was paid to it by Eskom in relation to Mr Brian Molefe’s pension and early retirement. The repayment has not been in dispute so the Fund complied with the judgment, as well as any further interest that may become payable on the outstanding amount. However, in order to manage the risk of possible losses to the Fund in the event that Mr Molefe does not pay the amount due to the Fund, the Fund has withheld the payment of Mr Molefe’s contributions of R2 196 342 referred to above, as well as interest payable to Eskom.
When will Mr Molefe repay the money that was paid to him?
Mr Molefe sought leave to appeal the decision and the Pretoria High Court dismissed his application with costs on 12 October 2022. The EPPF’s Chief Executive and Principal Officer Mr Shafeeq Abrahams has welcomed the court’s ruling. The Fund will issue a letter of demand to recover amounts due to it as soon as it receives the necessary tax directive from SARS. “We recognise that Mr Molefe may appeal to the Supreme Court of Appeal or the Constitutional Court, however we are hopeful repayment will take place soon and the matter can be put to bed,” adds Mr Abrahams.
Regards,
Eskom Pension and Provident Fund
