Details of the huge pension paid to former Eskom CEO Brian Molefe emerged at Parliament on Friday, on the third day of the investigation into state capture at the state-owned company.
Eskom Pension and Provident Fund (EPPF) CEO Sibusiso Luthuli told MPs that after contributing for 16 months to the fund, Molefe left at the end of 2016 with an after-tax pension cash pay-out of R7.9 million, and a regular monthly pension of R111,000 a month.
Molefe was seconded from Transnet to Eskom by Public Enterprises Minister Lynne Brown in April 2015. He resigned in the wake of Public Protector Thuli Madonsela's "State of Capture" report in November last year.
Luthuli said Molefe's salary at the time he left was about R5.6 million per annum.
At the time of his resignation, the EPPF had received a letter from Eskom – signed by board chairman Ben Ngubane – that "specifically requested the application" of certain pension fund rules.
This request essentially "bought 13 years of additional service" for Molefe, shifting up his pensionable age – on which amounts were calculated -- from an actual 52, to 65.
Such a request from Eskom, which was within the EPPF's rules, required that Eskom pay in R30.1 million into the fund. This was done in March this year, Luthuli said.
Shortly after his move over from Transnet in April 2015, Molefe had transferred R4.2 million he had in pension with that entity over to the EPPF.
On his resignation from Eskom 16 months later, Molefe's pension totalled R29 million, of which he had opted to take one third in cash.
This amounted to R9.7 million, which after tax was reduced to R7.9 million.
The two-thirds left in the fund had bought him a monthly pension of R111,000 a month, Luthuli said.
Following an outcry over the size of the pension he received, Molefe's pension was stopped earlier this year, pending investigation.
According to the EPPF's 2016 annual report, it is "the second-largest retirement fund in asset size in the country, with R129.9 billion assets under management as at June 2016".
Over the past six years, the fund's assets have more than doubled.
The report states the fund has a total of 84,998 members, of whom 46,941 are active, and 33,250 are pensioners.Suggest a correction