It is not a criminal offence for a company to not pay over its own contributions.
The fact that the Financial Sector Conduct Authority (FSCA) reported more than 1 000 companies to the police for not paying over their employees’ pension fund contributions, is a major step towards restorative justice for those thousands of workers who have had their future stolen from them.
That’s because, make no mistake, these employers are guilty of a criminal offence under Section 13A of the Pension Funds Act, which prescribes how contributions and other benefits should be paid to a retirement fund.
It is not a criminal offence for a company to not pay over its own contributions, but it is very much illegal – and disgustingly immoral – for an employer to deduct pension contributions from an employee and then not pay these to the specified retirement funds.
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In total, 5 830 employers were guilty of contravening the Act.
The numbers of non-compliant companies have swelled, following the inclusion of the Auto Workers Provident Fund and the Motor Industry Provident Fund.
Together, these funds account for 3 353 (57.5%) of the published employers.
Many of the companies cited by the FSCA owe more than R50 000 in unpaid contributions and some have amounts outstanding going back more than 10 years.
The theft of employees’ own contributions is bad enough, but if you think that the money not paid over could have been earning interest – and growing – then the crime is even more egregious.
Many of the workers affected are lower earners, who struggle to put food on their family tables and who have little in the way of conventional savings, so the small amounts deducted from their salaries would have made the difference between them being able to retire in some comfort… or to have to rely on government grants to their dying day.
Defaulting employers must be locked up. They deserve no better.
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