Technically insolvent state-owned agency paid its top management R37 million

The Road Accident Fund (RAF), which has been technically insolvent for some time, paid its top management team R37 million in the 2025 financial year.

This was revealed in the Road Accident Fund’s annual report, which showed a breakdown of personal costs and performance rewards.

It showed that the entity’s personnel expenditure over the last financial year was R2.468 billion, constituting 62% of total expenditure.

This cost included basic salaries of R1.786 billion, which equates to an average basic salary of R742,000 per employee.

The Road Accident Fund paid its employees R232 million in performance rewards, which accounted for 13% of total personnel costs.

What stood out is that the top management team, which consisted of 13 employees, was paid R37 million, including performance rewards of R8.2 million.

The former Road Accident Fund CEO Collins Letsoalo was paid R9.8 million in the 2025 financial year, which included a bonus of R2.8 million.

The Standing Committee on Public Accounts (SCOPA) said Letsoalo spent over R23 million on personal security for himself and his family between 2023 and 2025.

SCOPA member Alan Beesley said that it was outrageous that the former CEO of the Road Accident Fund had a private army protecting him and his wife.

Beesley added that roughly R4.6 million was spent on an armoured BMW X5 vehicle for his security detail in 2024.

“The reality is that all South Africans have paid for this exorbitant amount through the fuel levy, and at a time when claim payouts have reduced to a trickle,” Beesley said.

SCOPA launched an inquiry into the RAF’s financial mismanagement at the end of 2024. An SIU investigation followed.

Letsoalo was placed on special leave and subsequently suspended in June 2025. He challenged his suspension in the High Court, but his application was dismissed.

In August 2025, the Minister of Transport confirmed that Letsoalo’s employment contract had run its course, and he officially left the entity.

The Road Accident Fund is technically insolvent

Many people expressed concern about the high salaries and bonuses of top management, given the RAF’s dismal financial position.

The Road Accident Fund is technically insolvent and has been in this state for a considerable amount of time.

The accumulated deficit grew to R27.8 billion, up from R25.5 billion in the previous financial year.

The solvency ratio is 0.34:1, meaning the RAF holds only 34 cents in assets for every R1 of its liabilities. The current ratio is critically low at 0.33:1.

The RAF explained that its technical insolvency is driven by a fundamental structural mismatch between the fund’s revenue and its expenditure.

The RAF’s primary income is derived from a fixed levy on fuel sales, which is decoupled from the risk profile of road users or the frequency of road accidents.

While income is constrained by fuel volumes, the fund is legally obligated to pay out large compensation liabilities, often in lump-sum payments.

This imbalance has led to an unfunded claims liability of R40.4 billion at the Road Accident Fund.