Batseta welcomes withdrawal of the 2003 determination by the Minister of Employment and Labour

The Batseta Council of Retirement Funds for South Africa (Batseta) welcomes the recent withdrawal of the 2003 determination by the Minister of Employment and Labour, which previously exempted employers from the application of section 34A of the Basic Conditions of Employment Act (BCEA) in relation to benefit fund contributions.

The withdrawal of the determination represents an important step in strengthening the regulatory framework governing the payment of employee benefit fund contributions. Employers are now subject to enforcement under both labour legislation and the Pension Funds Act, reinforcing accountability and improving the protection of fund members.

Batseta believes this development will assist in improving compliance, enhancing governance standards, and ensuring that benefit fund contributions deducted from employees are paid over in full and on time, as required by law.

Commenting on the development, Anne-Marie D’Alton, Chief Executive Officer of Batseta, said: “This change ultimately supports good corporate citizenship by reinforcing accountability and ethical conduct in the treatment of employee benefits. It aligns closely with the principles of King V, which emphasise responsible leadership, fairness, transparency and the protection of stakeholder interests.”

Batseta encourages all employers, funds and administrators to familiarise themselves with the implications of the withdrawal and to review their payroll and contribution processes to ensure ongoing compliance.

And the implications for those who are non-compliant with section 34A of the BCEA are important. Non-compliance constitutes a criminal offence and may result in fines of up to R10 million, imprisonment for up to 10 years, personal liability for directors and senior management, and enforcement action by both labour authorities and the Financial Sector Conduct Authority (FSCA). This underscores the need for appropriate oversight, controls and governance at both operational and leadership level.