Employers who fail to pay over contributions to your pension fund will soon face hefty penalties.
An amendment to the Pension Funds Act proposed by the Financial Services Board (FSB) will make employers who fail to pay contributions into your pension fund liable for interest on the overdue sums of money.
The amendment has already been approved by Parliament and is likely to be signed into law next month, Dube Tshidi, the FSB's Registrar of Pensions, says.
The Registrar's latest report shows that at the end of 1999 employers owed R770 million to funds - including R356 million in employees' contributions which had not been paid over by the employers and R409 million in employers' own contributions.
This is theft, Tshidi says, and we are determined to put a stop
to it.
The Pension Funds Act amendment provides for interest to be charged at bank rates, when employers fail to pay over money due to the pension fund. It also puts a duty on trustees to inform you if your employer hasn't paid over the money.
Employers can steal money owed to the fund and the trustees can do nothing. But they should not fold their arms, Tshidi says. If the money is not coming in, the trustees of the fund should be asking questions.
Now trustees will have to inform members if contributions are overdue.
Criminal cases are pending against several employers who did not pay over pension fund money. Some have since paid the money and tried to persuade the FSB to withdraw the charges, Tshidi says. But I tell them there is no chance of that. Theft is theft.
The registrar also intends to clamp down on employers who don't submit their pension fund's financial statements to the Registrar in time. According to the report, 198 funds were late with their 1999 financial statements and 18 still had not submitted financial statements for 1998.
Late submissions of financial statements are punishable by fines of R50 a day for each day the statements are late and some funds have paid thousands of rands in fines, Tshidi says.
At present the money is paid out by the fund itself - but Tshidi hopes to further amend the Pension Funds Act to make employers and fund administrators liable, not the fund members.
The culprit must pay. If the fund is self-administered, the employer must pay the fine. If there is an administrator, the administrator must pay. That administrator is collecting administration fees from the fund and is responsible for getting the financial reports in on time.Why should innocent fund members pay?
Contributions to pension funds in 1999 totalled R48 billion, down from R54 billion in 1998. Benefits paid increased slightly from R61.6 billion to R61.9 billion.
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