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Cape Town – Former Eskom CEO Brian Molefe’s court date has been set to be heard in Pretoria’s North Gauteng High Court for three days at the end of November.
That is according to the Department of Public Enterprises spokesperson Colin Cruywagen on Tuesday.
Cruywagen was commenting on Molefe’s answering affidavit, which he filed in the high court last week. “The matter is set down in the high court on 29 November to 1 December, therefore I won’t respond or comment before the court proceeding,” he told Fin24.
Molefe was taken to court by Solidarity, the Democratic Alliance and the Economic Freedom Fighters, which wanted his R30.1m pension payout in 2017 ruled unlawful and set aside.
The matter of Molefe’s pension was heard in detail on Friday, when the Eskom Pension and Provident Fund (EPPF) appeared for the Eskom inquiry in Parliament.
EPPF CEO Sibusiso Luthuli said Molefe should never have been a member of the fund as he was on a five-year fixed contract. Only permanent employees are allowed to be members, he said.
However, in his answering affidavit, Molefe said he was first appointed as a permanent employee at Eskom in 2015, casting doubt on the EPPF’s argument.
"My original contract of employment concluded with Eskom expressly stipulated open-ended employment, which would have been until age 65. It was this contract that determined my eligibility for membership of the (Eskom pension fund),” he said in the affidavit, according to a report in Business Day.
However, in November 2015, Brown wrote to then Eskom chairperson Ben Ngubane, explaining that Cabinet had decided that his contract should be changed to a five-year contract, Molefe said.
He was then given a second letter of employment, which he signed on March 7 2017. “The subsequent alteration of the term of my employment … did not make me a temporary employee as contemplated in the rules of the fund, nor did it alter my status as an eligible employee," he said.
Eskom may have misled fund
On Friday, Parliament’s evidence leader, Nthuthuzelo Vanara, asked Luthuli if Eskom misled the pension fund. Vanara put it to Luthuli: “You acted in good faith, after an impression by Eskom was given that Mr Molefe was a permanent employee?”
“That is correct,” responded Luthuli. “We do place reliance on information that Eskom provides us. If they had brought us this information, we would have avoided this entire process.
“Legal opinion suggests that Mr Molefe should not have been a member of the fund in the first instance,” he said. “There is a court case in the matter and we can only wait for outcome of court process to confirm that legal view is 100% correct.”
Luthuli said the fund only discovered after the pension payout was concluded that Molefe’s contract was not permanent. However, he explained how the fund calculated the whopping R30.1m, which they approved for him.
How Molefe got R30.1m payout
Luthuli said Molefe's marriage to Arethur Moagi in December 2016 boosted his pension payout from what they had first calculated.
According to Luthuli, in August 2016, Eskom asked the EPPF to calculate Molefe’s pension if they applied two rules where Eskom bought 13 additional years of service for Molefe and waived certain penalties once Molefe turned 50.
They calculated that Molefe, who turned 50 in January 2017, would have received a R25.9m pension payout. However, this was a theoretical calculation and made certain assumptions, including that Molefe’s wife was five years younger than him.
When Eskom applied for the EPPF to process Molefe’s pension payout in December 2016 using rule 28 and rule 21.4, the EPPF followed the process. When they received actual information regarding Molefe, they discovered his salary had increased to R5.6m per annum and that his wife – who he had just married – was far younger than the five year assumption.
“If the spouse is much younger, it affects the cost of benefit,” said Luthuli. “The gap was much bigger.”
The salary increase and age of Molefe’s wife then saw his pension payout increase to R30.1m. Molefe requested that one third of that amount (less tax) be paid to him in cash (R9.7m - R7.9m after tax), while another two thirds was retained to be paid as a monthly pension payout from February 2017 (backdated to January, when the pension payouts began), Luthuli said.
Luthuli explained how they calculated the R30.1m. He said they took his gross pension pay-out due to his 16 months that he worked at Eskom (using his R5.6m salary) and calculated his gross pension if he worked 156 months (which was his 13 years of additional service bought by Eskom).
They then added an amount as a result of his younger wife. This amount then took his total payout to R30.1m.
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