Funds must be harder on employers who fail to pay contributions

08 November 2022 The Office of the Pension Funds Adjudicator (OPFA)
Muvhango Lukhaimane

Muvhango Lukhaimane

An employer who deducted provident fund contributions monthly from an employee’s salary but failed to pay it over to the fund has been ordered to pay the arrear contributions together with late payment interest.

The complainant told the Pension Funds Adjudicator Muvhango Lukhaimane that his employer SA Transport and Allied Workers Union had failed to pay contributions on his behalf to the Satawu National Provident Fund. The complainant’s fund credit was R37 897.47 as at 29 July 2022.

The fund submitted that a submission was made to the Financial Sector Conduct Authority (FSCA) for the suspension of contributions for the period February 2019 to August 2021 to allow the fund to recover from the errant activities of the fund’s previous leadership. The submissions to the FSCA remain pending.

The employer submitted that it has financial constraints and was negotiating with the fund to repay the outstanding contributions. It also undertook to revert within 30 days of 20 April 2022 which it failed to do. In addition, the fund indicated that as at 3 August 2022, the employer had failed to pay the outstanding contributions, despite there being an agreement in place for repayment of same.

Ms Lukhaimane ordered the employer to submit outstanding contribution schedules to the fund in respect of the complainant for the period November 2015 to July 2018, November 2018 to March 2021 and September 2021 to July 2022. The fund was ordered to compute the arrear contributions due by the employer, together with late payment interest. The employer was ordered to pay to the fund the complainant’s arrear contributions together with late payment interest.

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