Employers who default on paying over pension fund contributions in line of fire
BL Premium reports that the Financial Sector Conduct Authority (FSCA) is exploring ways to ensure defaulting employers pay outstanding contributions to pension funds amounting to more than R5bn. Thousands of employers have failed to make their obligatory contributions, a practice particularly prevalent among municipalities and in the private security industry. Zareena Camroodian, who is head of fund governance and trustee conduct in the FSCA retirement fund division, said the authority met with Nedlac and planned to meet the National Prosecuting Authority (NPA) this week about this problem. “At Nedlac, we are trying to get all the social partners and relevant parties in the room to collectively try to resolve the issue of arrear contributions. A dashboard will be developed with various metrics to track the progress made during these sessions,” Camroodian said. The FSCA is also working with the Department of Employment and Labour about possible amendments to the Basic Conditions of Employment Act (BCEA) to deal with the payment of arrear pension fund contributions by employers.
The Pension Funds Act makes it a criminal offence not to pay pension fund contributions, liable on conviction to a R10m fine or 10 years imprisonment. Camroodian said the challenge was a number of police stations did not understand that nonpayment of contributions constituted a criminal offence. “We are engaging the NPA so that they may take on a number of cases so that a loud and clear message is sent out that delinquent employers will not be tolerated,” Camroodian said. It is incumbent on retirement fund boards to institute legal action to recover outstanding contributions and to report contraventions to the SAPS, but they have largely failed to do so.
Read the full original of the report in the above regard by Linda Ensor at BusinessLive (subscriber access only)