Pension funds short R5bn

DEDUCTED, NOT PAID: ABOUT 7 800 MUNICIPALITIES, COMPANIES GUILTY

- Eric Mthobeli Naki

A large number of municipalities and private employers who did not pay employees' contributions over to pension funds may face investigations. Their nonpayments have tipped the new two-pot retirement system into turmoil.

The employers are facing imminent investigation by the department of employment and labour, which is planning to flood them with labour inspectors to check their compliance status.

They will also be sanctioned by the Financial Sector Conduct Authority (FSCA) which has a long list of private companies and municipalities that violated the pension fund rules and the law.

An FSCA report showed municipalities and firms, mainly in the security and cleaning sectors, owe their employees approximately R5.2 billion in outstanding pension fund contributions impacting 31 000 people, with some cases dating back to the 2000s.