The Financial Sector Conduct Authority (FSCA) has had enough and has published a comprehensive list of all the companies that have failed to pay their contributions to their employees’s pension and provident funds.
The FSCA said that thousands of employers have defaulted on their mandatory pension fund contributions, totalling R5.2 billion.
The FSCA disclosed 7,770 employers have failed to pay their contributions but did not disclose all names.
The authority broke down the list in the following manner and their reasoning for why these companies were named.
- 2,003 employers who have outstanding contributions that are more than R50,000 and have been outstanding for a period of more than 5 months;
- 200 employers who have outstanding contributions that are more than R50,000 but the last contribution date has not been provided;
- 113 employer’s whose outstanding contributions are less than R50 000, but the outstanding LPI is more than R50 000 and has been outstanding for more than 5 months; and
- 20 employers that have not contributed since date of participation in the retirement fund.
The balance of the 5,440 employers have not been included in the naming and shaming list as they do not meet the thresholds set out above.
The FSCA said that the process of withdrawing from the Two- Pot System played a significant role in brining this issue to the attention of the authority.
“The failure of employers to pay retirement fund contributions has severe consequences for members, affecting their withdrawal benefits, as we have seen with the introduction of the Two- Pot System,” the FSCA said.
“Withholding these contributions despite deducting the contributions from employees' salaries, is a serious offence that could amount to theft and, in some cases, fraud.”
Municipalities are failing their employees
There were a number of municipalities that were shamed by the FSCA and were listed.
Here are a few of the municipalities:
- Dr. Beyers Naudé Local Municipality in the Eastern Cape
- Mohokare Local Municipality in the Free State
- Letsemeng Local Municipality in the Free State
- Tokologo Local Municipality in the Free State
- Emalahleni Municipality in Mpumalanga
- Naledi Local Municipality in the North-West
- Merafong City Local Municipality in Gauteng
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