Former Eskom CEO Brian Molefe's marriage to Arethur Moagi in December 2016 boosted his pension payout, according to Sibusiso Luthuli, CEO of the Eskom Pension and Provident Fund (EPPF).

Luthuli was briefing Parliament’s public enterprises committee as part of its state capture inquiry.

According to Luthuli, Eskom asked the EPPF in August 2016 to calculate Molefe’s pension if they applied two rules where Eskom bought 13 additional years of service for Molefe and waived certain penalties once Molefe turned 50.

They calculated that Molefe, who turned 50 in January 2017, would have received a R25.9-million pension payout. However, this was a theoretical calculation and made certain assumptions, including that Molefe’s wife was five years younger than he was.

When Eskom applied for the EPPF to process Molefe’s pension payout in December 2016 using rule 28 and rule 21.4, the EPPF followed the process. When they received actual information regarding Molefe, they discovered his salary had increased to R5.6-million a year and that his wife – who he had just married – was far younger than the five-year assumption.

“If the spouse is much younger, it affects the cost of benefit,” said Luthuli. “The gap was much bigger.”

The salary increase and age of Molefe’s wife then saw his pension payout increase to R30.1-million. Molefe requested that one-third of that amount (less tax) be paid to him in cash, while another two-thirds was retained to be paid as a monthly pension payout from February 2017 (backdated to January, when the pension payouts began), Luthuli said.

Luthuli explained how they calculated the R30.1-million. He said they took his gross pension payout according to the 16 months he had worked at Eskom (using his R5.6m salary) and calculated his gross pension as if he had worked 156 months (which was his 13 years of additional service bought by Eskom).

They then added an amount as a result of his younger wife. This amount then took his total payout to R30.1-million.

Luthuli then said that, according to legal advice, Molefe should never have even been on the retirement fund, because he was on a fixed-term contract.