(Photo: Adobestock) 
In a startling revelation for workers in the automotive industry, this sector emerged as the worst offender in the Financial Sector Conduct Authority round-up of employers who are not paying over employee pension fund contributions.
This is a particularly worrying development in light of the potential retrenchments envisaged in this sector over the next year.
Read more: Tau describes way forward for SA automotive sector under siege
Naamsa, the automotive business council, has previously described the jobs situation as “a socioeconomic crisis in the making”. With the auto sector contributing 5.3% to GDP and 22.6% of manufacturing output, and supporting more than 500,000 jobs, the tariff shock has put the industry’s entire value chain at risk.
Read more: Trump’s tariffs are the final nail in the coffin of SA’s manufacturing industry
In a damning report shared with the media last night, the FSCA noted that 15,521 non-compliant employers were reported across 67 retirement funds, impacting around 592,000 retirement fund members. This is a significant jump from figures shared almost two years ago in December 2023, when the non-compliant employers numbered 7,770, affecting 310,000 employees.
The amount of estimated pension fund contributions in arrears is estimated at R7.29-billion, up from R5.2-billion in December 2023.
Drilling into the numbers
The FSCA data reflects the following:
- 5,671 employers have outstanding contributions exceeding R50,000, which have been overdue for five months and more.
- 80 employers have outstanding contributions exceeding R50,000, but the last contribution date has not been provided.
- 79 employers owe less than R50,000 in contributions, but outstanding late payment interest (LPI) exceeds R50,000 and has been overdue for five months and more.
- 17 employers who only have LPI outstanding.
Affected employees across different sectors
The private security sector, which was the worst offender in December 2023, seems to have cleaned up its act.
Keabetswe Tsuene, specialist analyst in the FSCA’s retirement fund Conduct Supervision department) said after concerns were previously raised regarding the Private Security Sector Provident Fund (PSSPF), the fund initiated a data cleansing drive, which remains ongoing. “Encouragingly, this effort has led to notable improvements in data quality. As a result, 428 of the 531 previously published employers have been identified as deregistered according to the Companies and Intellectual Property Commission (CIPC) registry, in respect of PSSPF,” she said.
What you can do if your pension contributions go unpaid
Check your payslip
Make sure pension deductions appear and keep copies as proof.Contact your retirement fund
Ask your retirement fund to confirm whether contributions from your employer are up to date.Escalate through HR or your union
Raise the issue formally with your company’s HR department or through your union if you are represented.Lodge a complaint with the Pension Funds Adjudicator (PFA)
Workers can submit complaints online or in writing. The PFA can order employers to pay what’s owed. You can contact the PFA office on 012 748 4000 or 012 346 1738 or use the complaint forms on their website - https://www.pfa.org.za/complaint-forms/Notify the Financial Sector Conduct Authority (FSCA)
The FSCA monitors compliance and can fine or sanction employers.Seek legal advice if needed
In persistent cases, workers (individually or through unions) can take employers to court to recover unpaid funds.
Incredibly, local government was identified as a key offender.
(Source: FSCA)
Referring to local government, Tsuene said that, in collaboration with the National Treasury, millions owed to members and retirement funds had been recovered. “This was achieved through the strategic withholding of equitable share allocations, compelling municipalities to make the necessary third-party payments. The FSCA acknowledges and appreciates the intervention of the National Treasury,” she noted. DM