BY: SINETHEMBA ZONDI
The South African Federation of Trade Unions (Saftu) is calling for strict regulation of companies that withhold workers’ wages but fail to pay them into appropriate funds. According to Saftu General Secretary, Muvhango Lukhaimane, workers in this sector are owed R7 billion in pension funds.
The Financial Sector Conduct Authority (Fsca) has identified 4,200 companies that collect employees’
pension money but do not deposit it into the correct funds. Most of these companies operate without licenses, and information can be found on www.fsca.co.za.
Lukhaimane stated that companies that do not deposit pension funds into the correct accounts must
face consequences. It is important that non-compliant companies pay within five months from the month of collection to the 252nd month, which means within 21 years.
“More than 80% of what I find from workers withholding their pension funds comes from them
taking it underground or not submitting their money request. It is essential for companies who do not pay pension funds to take responsibility within three months of collection,” Lukhaimane explained.
According to the Pension Funds Act, companies that fail to pay pension funds on time should be
reported. If companies do not pay into the correct pension funds, they could face penalties of up to R10
million or ten years in jail. Saftu’s General Secretary, Zwelinzima Vavi, emphasized the importance of paying pension funds promptly and allocating part of the funds to the employee. He said the money should be placed in the correct pension fund so that if an employee loses a job, they can
still lead a decent life.
“We commend the FCSA for cracking down on companies that exploit workers by withholding pension funds and failing to deposit them into the correct funds. The government must now ensure that these company owners are held accountable. Those who withhold funds owed to workers or misuse them will face heavy penalties or face the consequences of the pension law. This law ensures that they should pay a penalty of R10 million or serve a ten-year sentence,” Vavi said.
Vavi elaborated on the significance of pension funds in workers’ lives. He emphasized that these funds serve as a crucial support system, allowing individuals to lead stable and sustainable lives. “Pension funds are essential for workers as they help them live a sustainable life, allowing them to
provide for their families through government benefits. They can also afford to send their children to
school and improve their lives. If they are retrenched or unable to work, this money helps them cover their expenses while seeking new employment. Some buy houses or cars. If they cannot afford them, they suffer from stress and other health problems,” Vavi concluded.
He emphasized that companies that violate pension laws should face strict penalties. Lukhaimane urged employees to always check if companies that employ them are withholding pension funds but not depositing them into the correct pension funds. If they find that the funds are not being deposited into the correct accounts, they should contact their office at www.pfa.org.za. They can call 012 346 1738 or email DEnquiries@pfa.org.za
