Chris Hani Development Agency Under Fire as Benefits Suspension Exposes Staff to Risk

Medical, Death, and Disability Benefits Halted; Municipality Cites Revenue Issues

KOMANI – Employees of the Chris Hani Development Agency (CHDA) have been left in a state of alarm after their critical insurance benefits—including medical, death, and disability cover—were suspended due to several months of unpaid employer contributions.

The suspension, which took effect on 4 November, means staff currently lack essential financial protection.

A suspension notice sent to workers by the retirement and insurance administrator confirmed that contributions have not been received since the end of July. The notice explicitly stated that all risk benefits were halted from the suspension date, meaning no claims could be paid out in the event of an employee’s disability or death while the policy remains lapsed.

The communication also contained a serious caution: the non-payment of contributions may constitute a criminal offence. The administrator warned the matter could be reported to the Directorate of Public Prosecutions and the Registrar of Pension Funds should the outstanding amounts remain unsettled.

Staff Alarm and Unresolved Issues

Several CHDA employees expressed deep concern over working without a safety net. The situation has reportedly created significant stress, as staff are unsure when or if their benefits will be reinstated.

The insurance crisis is compounding a range of other unresolved issues cited by workers, including persistent late salaries, disputes over long-standing delays in salary increments, and governance issues. Employees claim to have escalated their concerns to Eastern Cape Premier Oscar Mabuyane after internal efforts failed.

Operational pressures at the agency were also highlighted, including the recent resignation of three board members—which has resulted in a loss of quorum—and the introduction of stringent cost-cutting measures due to cashflow challenges.

Municipality Response

Responding to inquiries, Chris Hani District Municipality Communication Manager, Thobeka Mqamelo, said the district is actively working to resolve the challenges facing CHDA.

Mqamelo explained that the delay in transferring operational grant funding earlier in the 2025/26 financial year was caused by a low revenue base in the first quarter. She confirmed that this issue has since been resolved, and the municipality is now providing consistent financial support to ensure salaries are paid.

The matter of outstanding salary increments is expected to be finalised at a board meeting scheduled for January 2026.

The District Municipal Council recently resolved to appoint an Interim Board of Directors to strengthen governance, oversight, and accountability at the agency. Mqamelo noted that CHDA has also produced a revenue enhancement plan to improve its own sustainability.

Crucially, the insurance administrator has informed staff that benefits can only be reinstated once all outstanding contributions are paid in full. Until then, employees remain without medical aid, life cover, or disability protection.