Eskom Pension and Provident Fund (EPPF) CE Sibusiso Luthuli has justified the fund’s decision to grant Eskom CE Brian Molefe a R30m pension payout on grounds of early retirement on the basis of a rule pertaining to retrenchment.
The decision, which has since been revoked, would have equated to paying out Molefe for the remainder of his five-year contract, of which only 18 months had been worked when he announced his voluntary resignation.
Public Enterprises Minister Lynne Brown said last week she disapproved of the payment and decided that returning Molefe to his post at Eskom would be cheaper for the fiscus than the pension payment.
However, controversy rages over whether Molefe’s "reinstatement" was legal, with the DA asking a court on Monday to set aside the decision.
There was also murkiness around the legality of the pension payment as the fund’s rules state that to qualify for early retirement, a person must be at least 55 years old — Molefe is 50. The employer also has to undertake to make good the contributions to the fund that the employee would have made had he or she remained until retirement age.
After numerous inquiries, Luthuli responded on Tuesday evening, arguing that Molefe’s case was, in fact, dealt with as a retrenchment.
He said under rule 28 of the fund, which deals with retrenchment, and rule 21, which deals with early retirement, the "rules provide for a member to retire from the age of 50 provided the employer makes a special payment to the EPPF in order to compensate the EPPF for the cost related to the early retirement".
However, rule 28 specifies in what instances a person would be entitled to retirement even though they had not reached retirement age.
These included being retired from service due to a reduction or reorganisation of staff, or due to the abolition of the incumbent’s post, or to make efficiency improvements.
Luthuli did not explain in his statement how Molefe, who voluntarily resigned, saying he wanted to clear his name of corruption allegations, would qualify for retrenchment.
The explanation that Molefe had, in fact, been forcibly retired due to operational considerations follows an early explanation by Brown last week that he had taken early retirement.
Eskom’s official statements at the time, and Molefe’s own made on camera, were that he had resigned.