Security firms, retailers, municipalities, a church and a renowned fashion designer are among thousands of employers exposed for not paying pension funds for their workers.
The Financial Sector Conduct Authority has released names of more than 3,000 employers who failed to make pension contributions for a period between four months up to 21 years, collectively owing about R7bn to retirement funds. The arrears owed by employers have an impact on how much pension the workers receive when they retire or change jobs.
The City of Ekurhuleni and Vhembe municipality in Limpopo are listed to have not paid pension contributions for its councillors in eight years. So is the dysfunctional Ditsobotla municipality in North West which has not paid for three and a half years. Ekurhuleni spokesperson Zweli Dlamini claimed the report was not true and that the council's books were in order. “The city doesn't owe any employee,” he said.
Chubb Guarding, a security firm, is listed to not have paid for 21 years while the Central Methodist church is 4 months in arrears. Fashion designer David Tlale has not paid in 18 months, while branches of retail giants Spar and Pick n Pay have been listed to not have paid for eight months to 4 years.
Tlale told Sowetan that his business was still recovering from Covid-19 lockdown and had been avoiding retrenching his 28-member staff with two of them expected to go on pension later this year and next year.
“I work mostly with young people and the lacking thing is contribution towards the [pension] fund. We are currently making payment plans with the pension fund office, because that’s where the contributions go to... until we put it in effect,” he said.
Several Eastern Cape-based municipalities owe years in arrears, including the Buffalo City which has not paid councillor contributions in six years. Security firms, form the bulk of the debt with some owing contributions, including Falcon’s security is listed to have defaulted for the past three years.
Pishon Security Services based in the West Rand tops the list with being in arrears for 21 years. Its owner Themba Chauke said he could not pay his employees' pension contributions over to the Private Security Sector Provident Fund because his business was not making money.
He said when he started his company he was required by the Private Security Industry Regulatory Authority (PSiRA) laws to register with a provident fund. He owes over R200,000 to the fund
“The business has not been good and I told the Fund that I can no longer afford to pay my contributions because I can't get tenders. Now I use casual workers when they are required. My clients don't want to pay me in PSiRA rates and at the end of the day I take what I get and I'm not able to pay the Fund,” said Chauke.
Vhembe municipality said it was not aware of its debt because they have been consistent with making payments to funds.
"Councillors' pensions payment in Vhembe doesn't have a challenge," spokesperson Matodzi Ralushai told Sowetan.
Muvhango Lukhaimane, adjudicator at the Pension Fund Adjudicator which handles pension disputes for workers, said more than 80% of the cases they handled in the current financial year were about outstanding contributions. She put the blame on both companies and fund who manage the contributions.
List also include security firms, retailers, churches and a renowned fashion designer
Methodist church, David Tlale and Pick n Pay amongst employers owing almost R7bn in unpaid pension
Security firms, retailers, municipalities, a church and a renowned fashion designer are among thousands of employers exposed for not paying pension funds for their workers.
The Financial Sector Conduct Authority has released names of more than 3,000 employers who failed to make pension contributions for a period between four months up to 21 years, collectively owing about R7bn to retirement funds. The arrears owed by employers have an impact on how much pension the workers receive when they retire or change jobs.
The City of Ekurhuleni and Vhembe municipality in Limpopo are listed to have not paid pension contributions for its councillors in eight years. So is the dysfunctional Ditsobotla municipality in North West which has not paid for three and a half years. Ekurhuleni spokesperson Zweli Dlamini claimed the report was not true and that the council's books were in order. “The city doesn't owe any employee,” he said.
Chubb Guarding, a security firm, is listed to not have paid for 21 years while the Central Methodist church is 4 months in arrears. Fashion designer David Tlale has not paid in 18 months, while branches of retail giants Spar and Pick n Pay have been listed to not have paid for eight months to 4 years.
Tlale told Sowetan that his business was still recovering from Covid-19 lockdown and had been avoiding retrenching his 28-member staff with two of them expected to go on pension later this year and next year.
“I work mostly with young people and the lacking thing is contribution towards the [pension] fund. We are currently making payment plans with the pension fund office, because that’s where the contributions go to... until we put it in effect,” he said.
Several Eastern Cape-based municipalities owe years in arrears, including the Buffalo City which has not paid councillor contributions in six years. Security firms, form the bulk of the debt with some owing contributions, including Falcon’s security is listed to have defaulted for the past three years.
Pishon Security Services based in the West Rand tops the list with being in arrears for 21 years. Its owner Themba Chauke said he could not pay his employees' pension contributions over to the Private Security Sector Provident Fund because his business was not making money.
He said when he started his company he was required by the Private Security Industry Regulatory Authority (PSiRA) laws to register with a provident fund. He owes over R200,000 to the fund
“The business has not been good and I told the Fund that I can no longer afford to pay my contributions because I can't get tenders. Now I use casual workers when they are required. My clients don't want to pay me in PSiRA rates and at the end of the day I take what I get and I'm not able to pay the Fund,” said Chauke.
Vhembe municipality said it was not aware of its debt because they have been consistent with making payments to funds.
"Councillors' pensions payment in Vhembe doesn't have a challenge," spokesperson Matodzi Ralushai told Sowetan.
Muvhango Lukhaimane, adjudicator at the Pension Fund Adjudicator which handles pension disputes for workers, said more than 80% of the cases they handled in the current financial year were about outstanding contributions. She put the blame on both companies and fund who manage the contributions.
“In instances where members become aware of the arrear contributions and take action against the defaulting employer, it may still take months or even years to recover the money. Sometimes the employer may have closed down leaving the member stranded without anyone to hold accountable. This is why its important for funds to act as quickly as possible to detect and act against defaulting employers, as they are required to, in terms of the legislation,” said Lukhaimane
“Therefore, it is imperative that the fund informs member [worker] of the employer’s failure to pay over contributions immediately, institute steps against the employer including reporting to SAPS as this is a criminal offence,” she added.
She advised workers to seek the annual statements from their pension fund managing authority regularly to check that their monthly contribution have been paid correctly.