It doesn’t add up

THERE was an outcry, and rightly so, when it was announced that Brian Molefe was to be given a “pension” worth R30 million after having only worked at Eskom for two years or so.

Lynne Brown blocked this and instructed them to go back to the drawing board.

It is quite simple, Lynne. Members of a Defined Contribution Pension scheme contribute up to 7.5% of their pensionable salaries to the fund, and the employer between 7.5% and 12.5%, making a total of up to 20%.

These monies are invested in a portfolio to grow and provide for their ultimate retirement, at the earliest age of 55, when up to one-third of the fund value can be taken as cash and the balance has to be applied to a life annuity to provide a monthly income.

This is the law and it is applicable to all employees, including Molefe.

So, with an annual income of R5.9 million, 20% of salary annual contributions would be approximately R1.2m per annum.

Over two years, R2.4m plus growth could be about R2.7m. Besides the fact that Molefe is 50 and thus not eligible to receive any payout now, the proposed “pension” was more than 10 times what would normally be the case.

Eskom and the Molefe camp may argue that this was not a pension but a bonus.

What could Brian have done in those two years to merit a R30m bonus? One would have thought that R5.9m a year would be more than adequate compensation for doing what he is paid to do.

This is not a pension, or a bonus, but just another case of the raiding of state resources, and is to be roundly condemned.

Shame on you, Eskom, for wanting to deplete your coffers by such an hugely inflated amount, and shame on you, Brian, for even considering accepting such largesse.