Safeguard your retirement and check that your employer is making the necessary contributions on your behalf. The retirement sector not only faces the 48 billion rand unclaimed benefits problem, but also faces unpaid and unallocated contribution problems as reported by Smart About Money.
An unallocated benefit refers to retirement contributions which have been paid over to the relevant funds but have not been allocated to a member. Unallocated benefits could stem from employers not submitting contribution schedules.
Laura du Preez has reported on communications which were issued by the FSCA (Financial Sector Conduct Authority) in August 2023 and March 2024. The FSCA released a communication naming and shaming employers who are in arrears with employee retirement fund contributions.
The issue of arrear contributions has been along-standing problem within the retirement sector and is an injustice against retirement fund members. Employers were warned in 2022 that the FSCA intended to publish the names of employers who were in arrears with contributions. According to Smart About Money, the number of errant employers is still in the region of 4 000.
Employees can approach the Pension Funds Adjudicator (PFA) to action recourse against an employer in arrears. The PFA highlighted that, often employees realise there is a problem when it is too late. Pension contributions which have gone unpaid for three or more years prescribe and the employee is left with no remedial options.
The Pension Fund Act obliges Trustees to lodge a criminal case and hold the employer liable when contributions have gone unpaid for three months.
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