Over 4 000 employers in pension fund contribution arrears

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Over 4 000 employers are in arrears in their contributions towards pension funds. This is according to the Financial Sector Conduct Authority.

The organisation says as this forms part of the employee remuneration package, this means that these employers are withholding what is owed to their employees and are in violation of the law.

The FSCA says some 4 178 South African employers are behind in making retirement fund contributions towards employee retirement funds.

Congress of South African Trade Unions (COSATU) says this is a criminal act and it’s tantamount to theft of workers’ money. Many of the perpetrators are in the security and cleaning sectors.

Mathew Parks of COSATU says should a worker pass on, or retire, this non-payment could leave their families in poverty, despite money having been deducted from their salaries but not being paid over to pension funds.

“We have requested as COSATU for urgent engagement with the FSCA, National Treasury and industry as well including pension funds to meet at Nedlac to make sure we can address this issue, because this is a criminal issue. The NPA should get involved, and it must prosecute these employers and confiscate their assets, ensure that the money owed to these pension funds, which is workers moneys, are paid,”

This comes ahead of September 1st, 2024, the date where the two pot retirement system allowing workers to access a portion of their retirement funds comes into effect.

“The reforms will happen on the 1st of September, we are working closely with Treasury at Nedlac, SARS, the FSCA and the pension funds to ensure that it’s a smooth implementation come 1 September. Make sure that pension rules are amended to allow it, make sure that there is sufficient liquidity and the disposable funds to assist these workers and also to make sure that workers are fully aware of their rights, what they can and cannot do. Of course, this will be the first of many steps to reform pension funds to see how to boost savings, how to give workers more comfort during the course of their careers,” Parks explains.

The FSCA has a list of the non-compliant companies on its website.

The organisation says it will be launching a campaign to educate members and the boards of trustees of retirement funds, as well as the public, about their rights and responsibilities regarding retirement fund contributions and the two-pot retirement system.