The FSCA has published the names of more than 3 000 employers that are in arrears with their retirement fund contributions – and the Authority says it will be disclosing the names of non-compliant employers every quarter.
The 101-page document listing the employers is available on the FSCA’s website. The employers are listed according to the period for which the outstanding contributions are due, from longest to shortest.
The worst offenders are some 20 years in arrears.
Most of the employers owe contributions to the Private Security Sector Provident Fund, followed by the Bargaining Council for the Furniture Manufacturing Industry of the Western Cape Provident Fund.
The FSCA said its preliminary statistics indicate that municipalities and private sector companies owe about R1 billion and R6bn, respectively, in contributions.
Despite the financial difficulties faced by municipalities and the effects of Covid-19 on the economy, the Authority said employers have an obligation to their employees to pay over deducted contributions to retirement funds, per the Pension Funds Act (PFA).
The FSCA informed the retirement industry in June last year of its intention to publish the list and asked the boards of retirement funds to share Communication 17 of 2022 (RF) with their participating employers.
The information on the list, which was published on 31 August, was provided to the FSCA by the retirement funds in which the employers participate.
The FSCA received the names of 5 430 employers that were in contravention of the PFA by the end of April this year. Twenty-eight percent of the employers had contributions outstanding for one month, 24% for two to 12 months, 23% for 13 to 60 months, and 25% for five or more years.
The published list shows the 3 262 employers that, as of 30 April, have outstanding contributions for four or more months.
The Authority pointed out that because of the delay between the reporting date of the arrear contributions and the date of publication, some employers on the list may have paid over their outstanding contributions.
Statutory obligations
The FSCA drew attention to employers’ statutory obligations regarding contributions.
Section 13A(1) of the PFA requires an employer of a retirement fund member to pay contributions deducted from the member’s remuneration, as well as the employer’s contribution, to the fund.
The contributions must be paid over within seven days after the end of the month for which the contributions are due, per section 13A(3)(a).
In terms of section 37(1)(a) of the PFA, any person who contravenes or fails to comply with section 13A is guilty of an offence and liable on conviction to a fine not exceeding R10 million or to imprisonment for up to 10 years, or both.
The failure to pay over contributions compromises the retirement benefits of fund members and impacts their risk benefits. If an employer does not pay over contributions for three months, the life insurer will repudiate a claim. Where a death benefit becomes due, the member’s dependants will not be paid the insured portion of the benefit.
The Authority said the boards of retirement funds have a duty to recover outstanding contributions from employers by making use of the various avenues available to them.
Conduct Standard 1 of 2022 places notification and reporting obligations on the board of a fund when an employer fails to comply with 13A(2)(b) or 13A(3)(a) of the PFA.
The Conduct Standard became effective on 19 February this year.
Boards must report material contraventions to the affected members and the FSCA. Importantly, where the contravention persists for 90 days, boards must lay a charge with the South African Police Service against the employer.
The FSCA said it “is continuing to engage with the relevant authorities to ensure that the criminal element of this contravention is effective”.
For more information about the list, contact the FSCA’s Retirement Funds Supervision Division by emailing Ms Takalani Lukhaimane at Takalani.Lukhaimane@fsca.co.za or FSCAQueries13Anotices@fsca.co.za
Is this a joke my husbund and I tried to get justice from this pension fund adjudicator quess what employer got away with all their lies .There is no justice in satan’s world .
How if disadvantaged community who are staying in rural areas does not read write or have no information . Us it possible to help them.
This is scary and, drives the country to All Low Poverty levels. What’s happens when the employees owed hard earned contributions to the Pension Fund go on retirement with their monies not invested accordingly….hunger
i worked for primeserv staffing since 2019 but they forward my contrIbution to NBBCRFL, they stated to sent my contribution in 2022 january. i have open the with PFA.
I was employed by IGI i only got my one-third of my pension funds and Glenrand said will get two thirds of my pension at the age of sixty five even know i didn’t get anything
South African Post Office owes employees pension money
Would appreciate it if a follow up article can be published in 2024. Directors of the companies that did not pay the contributions, as required, must be held accountable. Once held accountable, the media should be informed, so that employees can at least get that sense of comfort.