South Africa: Treasury Found 16 Municipalities Across the Country Pocketed Workers' Pension Monies

8 July 2026
Scrolla (Johannesburg)
By Anita Dangazele
  • National Treasury found 16 municipalities failed to pay over pension, UIF and PAYE deductions already taken from workers' pay.
  • The finding is one reason Treasury withheld R13.5 billion in July transfers from 69 municipalities nationally.

Sixteen municipalities took money out of their workers' salaries for pension contributions, and did not pay it over to the pension funds it belonged to.

The finding came out as part of National Treasury's decision to temporarily withhold R13.5 billion in July equitable share transfers from 69 municipalities across the country, including R3.6 billion from the City of Johannesburg.

Treasury said the municipalities had shown persistent, serious non-compliance with the Municipal Finance Management Act.

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The South African Local Government Association, which represents municipalities, said it was specifically concerned about this part of Treasury's findings.

Spokesperson Motalatale Modiba said pension, UIF and PAYE deductions already taken from an employee's pay never belong to the municipality, and using that money for anything else undermines workers' rights and exposes municipalities to legal risk.

SALGA said municipalities must pay these deductions on time and that it has zero tolerance for this kind of financial misconduct. It called on councils and accounting officers to investigate, hold those responsible accountable, and recover any losses.

Treasury has not published a list naming which 16 municipalities failed to pay over these deductions. The affected municipalities span all nine provinces and include major metros such as Johannesburg, Nelson Mandela Bay, Buffalo City and Mangaung, though it is not yet known which of them are among the 16.

Treasury said withheld funds will be released once municipalities submit signed payment plans, starting with a portion large enough to pay the pension fund and the auditor-general directly. Once that payment is confirmed, the rest of the funds follow.

Treasury Deputy Director-General Ogalaletseng Gaarekwe said this could mean some municipalities have their funds withheld for as little as two weeks, depending on how quickly they act.

Gaarekwe said the intervention had already prevented two water boards from collapsing. She also said actually holding officials accountable for the missing pension payments is not Treasury's job. That responsibility sits with municipal councils and their oversight structures, the same bodies that were meant to catch this in the first place.

Read the original article on Scrolla.

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