WeeklySA_AdminOWE:Company owes millions in unpaid contributions
By Isaac Moledi
More than 15 500 SA Post office (SAPO) employees may face uncertain future unless the embattled SOE comes up with a plan to rescue its financial situation which has left its retirement and medical aid funds in disarray and dire constraints.
In its corporate plan for 2021 to 2024, the Post Office projected a loss of R2.5 billion for the 2020/21 financial year, which the company attributes to a dire financial situation which has been been exacerbated by the Covid- 19 pandemic.
“The effects of the COVID-19 pandemic and the subsequent lockdown of the economy have severely impacted the SA Post Office’s financial position. Revenue generated by the entity’s primary revenue stream, letter mail, was severely affected during the lockdown. The sharp decline in revenue transitioned the SA Post Office from financially challenged to a state of financial distress,” the company said in its Chairman’s report.
Reports by experts believe that SAPO’s employee medical aid and pension funds contributions face suspension as the embattled company owe millions of rands in unpaid contributions to these funds. Other creditors including the SA Revenue Service obligations also remained unpaid as the company is “trying to manage the situation.” Weekly SA Mirror could not verify with SARS how much SAPO owed it as we could not get the response from them.
According to reports that Weekly SA Mirror could not independently confirm, the Post Office owes R543 million of its 15 500 employee retirement fund contributions while a significant amount in medical aid contribution is still outstanding. As of 7 September this year, the Post Office owed R582 million to Medipos Medical Scheme, according to the scheme principal officer Thabisiwe Mlotshwa. Medipos Medical Scheme provides medical aid to Post Office employees.
Post Office spokesperson Johan Kruger was this week quoted as saying that his company had been unable to pay monthly contributions to the pension fund or the medical aid fund. According to him, revenue during the Covid- 19 lockdown had dropped, making the Post Office to prioritise employee salaries. Last year October, Medipos Medical Scheme warned that the scheme would stop providing cover if arrear medical aid contributions were not paid by the end of December last year.
However, a weekly newspaper quoted Mlotshwa as saying that a deal with the Post Office had been struck where Post Office contributions were received by the medical scheme. Although a significant amount was still outstanding, the scheme would no longer suspend Post Office employee benefits.
A proposal to clear the outstanding contributions owed was undertaken by the embattled Post Office. In the meantime, the scheme undertook to continue its discussions with the Post Office to ensure that the outstanding amounts are brought up to date while members continued enjoying the benefits offered by the scheme.
According to Kruger, the Post Office had been able to pay part of the medical aid backlog after deciding to pay the cash portion of employees’ salaries in full and to hold back on pension and medical contributions as an interim measure.
