A parliamentary oversight committee has launched a probe into serious allegations of financial malfeasance at the Government Pensions Administration Agency (GPAA), following the suspension of a senior official who blew the whistle on questionable payments.
The Portfolio Committee on Public Service and Administration expressed deep concern over media reports detailing two major incidents at the agency, which administers the pension fund for over 1.7 million active and retired public servants.
The scandal first came to light when a senior financial manager was suspended and faced disciplinary action for refusing to authorize a payment of R21 million to a service provider that had not been properly vetted. This week, a second, far larger allegation surfaced: the GPAA allegedly signed a 10-year lease agreement worth R1 billion for a building with a landlord who does not own the property.
In an interview, the committee’s chairperson, Jan de Villiers, described the lease as a “ghost contract on a ghost building,” though he later clarified the building itself does exist. The property in question is owned by JSE-listed company Attac and is reportedly fully tenanted, meaning the GPAA could not have occupied it even if the lease were legitimate.
“The GPAA cannot afford to use pensioners’ money corruptly,” de Villiers stated. “If this amount of money… was earmarked to be paid in rent to a building which can’t even be occupied… that could be mass corruption.”
The situation escalated when the financial manager who flagged the R21 million payment was threatened with disciplinary action by the GPAA’s CEO. However, following a report to the Finance Minister, the CEO was subsequently placed on precautionary suspension—a move De Villiers commended.
When pressed on the overall financial health of the GPAA, De Villiers said the committee is “very concerned.” He indicated that the recent allegations point to a severe breakdown in financial controls.
“To have these types of financial irregularities in a space of two weeks is an indication of serious financial controls which have melted down,” he said.
De Villiers confirmed the committee has not yet seen the controversial lease agreement but will demand all relevant documents as part of its oversight investigation. He stated the committee plans to summon the acting CEO of the GPAA to appear before them to establish the facts.
The Auditor-General will also be expected to examine the new incidents, which occurred after the agency’s last audited financials.
The GPAA is responsible for the retirement savings of South Africa’s public servants, making the allegations of financial impropriety a matter of significant public interest and national concern.