A bad tempered battle is brewing between Mamodupi Mohlala-Mulaudzi, the now suspended CEO of Property Practitioners Regulatory Authority (PPRA), and the office she used to head, the Pension Funds Adjudicator.

On March 28, the PPRA suspended Mohlala-Mulaudzi based on two specific allegations: that there were irregularities in how certain staff members had been hired, and that she’d withheld some employees’ pension fund contributions.

This last allegation contains added spice precisely because Mohlala-Mulaudzi was herself the Pension Funds Adjudicator between May 2007 to October 2009 – so she ought to have known what the rules were around withhold retirement contributions.

Steve Ngubeni, the chair of the PPRA, told Today’s Trustee: “she has been suspended because of the negligence in her duties and ignoring the law.” Nonetheless, he said, the suspension is “precautionary”, so she will continue to earn her full salary until the investigation is completed.

Controversy appears to follow Mohlala-Mulaudzi. As a previous board member of the SABC, she was accused of acting in a high-handed manner, and showing scant respect to staff. At the PPRA, the claims of bullying followed her. Then last November, current Pension Funds Adjudicator (PFA), Muvhango Lukhaimane published a ruling hauling Mohlala-Mulaudzi over the coal for disregarding pension fund rules.

The ruling said that she’s apparently instructed the PPRA’s human resources department not to deduct retirement fund contributions from the salaries of five staff members who’d been employed since July 2019. This flew in the face of the PPRA’s pension fund rules, which said that every permanently employed staff member be registered as a retirement fund member, and contributions would be paid monthly. Yet Mohlala-Mulaudzi said this shouldn’t apply to the five employees since they found the retirement contributions “unaffordable”.

To some, that might seem like an open and shut case. But what Ngubeni’s PPRA board is trying to answer is whether Mohlala-Mulaudzi was “truly negligent”, whether she “ignored the law” and if her actions qualify as criminality.

Mohlala-Mulaudzi did not respond to requests for comment from Today’s Trustee.

Who protected Mohlala-Mulaudzi?

There are plenty of questions yet to be answered about this case, however.

Foremost of which is why it took the PPRA four months to suspend Mohlala-Mulaudzi after that PFA determination in November 2021. In the end, it was only after a whistleblower contacted the Public Service Commission this year that the board acted.

Asked about this, Ngubeni says: “It is correct [that] the spark for the whole investigation and the suspension was the Public Service Commission whistleblowing report. But it’s also [because of] the fact that there is a new board in place, and it felt that it must look into that whistleblowers report.”

The PPRA got a new board in November 2021 a few months after Mmamoloko Kubayi-Ngubane took over from Lindiwe Sisulu as the Minister of Human Settlements, and overhauled the property agency’s governance structure.

The Democratic Alliance has long been in a war with Mohlala-Mulaudzi, which reached fever pitch when she hit DA MP Emma Powell with a R1.5m defamation claim for describing her as an “increasingly rogue CEO”.

Powell tells Today’s Trustee she believes the old board simply ignored the raft of serious allegations that had been piling up against Mohlala-Mulaudzi, thereby protecting her. She says Mohlala-Mulaudzi’s suspension indicates that the “patronage networks” that “protected” her are slowly being dismantled.

Today’s Trustee reached out to some of the old board members, one of whom, Dr Eugenia Kula-Ameyaw, said that while it seemed her board dragged its feet, it wasn’t so straightforward.

For one thing, she says, Mohlala-Mulaudzi was skillful at convincing some members of the board that there was nothing untoward about exempting some employees from contributing to the pension fund.
While the pension fund’s board of trustees had been adamant that this was a breach of the rules, the PPRA’s board was divided on this matter. Says Kula-Ameyaw: “when she said those employees did not contribute because their take-home pay was low, three of us did not buy that and raised its legality. But I think our board was divided or compromised.”

She said the old board battled with this issue from early 2020 until its term had almost come to an end. But the board members didn’t want to leave this matter unsolved, which is why it referred the case to the PFA, which came back with that blistering finding. The problem was, that process took time. “At the end of the day, the PPRA board needed to decide to hold the CEO accountable,” she says. “It did not make any sense [from a human resources perspective] not to pay pension [contributions] as it was setting the institution up for being sued by the employees later.”

In the end, the PPRA had to make good on those missing contributions. Alexforbes Actuaries calculated that it owed R1.14 million to the fund in outstanding contributions and interest.

Why Mohlala-Mulaudzi’s non-compliance is a big deal

While this case deserves added scrutiny because the person accused of skipping pension fund contributions was herself the former adjudicator, this worrying trend in on the rise across the country.

The number of complaints to the PFA about precisely this is growing and, in many cases, retirement fund members themselves didn’t even know their contributions weren’t being paid – they simply assumed that it was being deducted from their salaries and being paid over.

Usually, it’s only when the PFA begins investigating wider complaints about pension benefits that it picks up that there have been partial payments, or none at all. Or, in some cases, that the employees weren’t even registered with a fund, even though deductions had come off their salaries. Sometimes, trustees of funds lodge complaints with the PFA about this, since section 13A of the Pension Funds Act obliges it to report an employer’s non-compliance.

But the fact that Mohlala-Mulaudzi was the adjudicator herself for two years meant she would have been more aware than most what kind of devastation this can cause.

Kula-Ameyaw says Mohlala-Mulaudzi even used her experience as justification for what she was doing. “She would argue; ‘I was a Pension Funds Adjudicator, this is acceptable’,” said Kula-Ameyaw.
Because of this, some of the old board members genuinely bought her argument. “We could not decide,” she added.

When Today’s Trustee asked the current adjudicator, Lukhaimane, about this case, she said she’d prefer not to comment on what Mohlala-Mulaudzi should have known. Rather, she says, her office has done what it had to, and it’s now up the Financial Sector Conduct Authority (FSCA) and the PPRA to take the next steps.

The FSCA, however, has still failed to do anything.

Asked what is has done with the PFA’s determination, the FSCA’s executive in charge of supervising retirement funds, Olano Makhubela said the regulator is still “investigating”. “At this stage, the FSCA is investigating the employer’s non-compliance with the rules of the fund and the PFA, and the board of trustees is also undertaking its investigation,” he said.

Which, of course, is far from optimal. When the rules are broken – especially by somebody who knew what the rules of the game were in the first place – the regulator can’t afford to be dozing on the sidelines.