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Daily Maverick writes that in a tough economic environment, unions and state-owned enterprises (SOEs) are starting to default on employee benefits such as retirement fund and medical scheme contributions.
And there are apparently few to no consequences for this behaviour. Last week, Pension Funds Adjudicator Muvhango Lukhaimane issued a ruling against the SA Transport and Allied Workers’ Union (Satawu) after an employee complained that his provident fund contributions had not been paid over to the Satawu National Provident Fund. The complainant, Mr Louw, has been employed by the union since 1 February 2015. The union admitted it had only made “partial” contribution payments from October 2015 to January 2019, when the outstanding contributions to Louw’s retirement fund amounted to R88,730.82. The fund was ordered to calculate the arrear contributions due by Satawu, together with late payment interest. The union has to make payment within two weeks of receiving the calculated amount. Lukhaimane said as many as 40.55% of complaints for the 2021/22 financial year related to employers’ outright failure to pay over contributions. Employees can open a criminal case with the SA Police Service, but Lukhaimane said this did not happen often as employees feared dismissal. She said retirement funds and their trustees were never held responsible for outstanding contributions, although the Pension Funds Act placed a duty on them to ensure recovery from employers. Funds, trustees and administrators are guilty of negligence if they do not inform members of the employer’s noncompliance. Members usually only discover this when they try to put in a claim.
- Read the full original of the report in the above regard by Neesa Moodley at Daily Maverick
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