Rise in employers defaulting on pension fund contributions alarming

THE Financial Sector Conduct Authority (FSCA) released its latest report on employers defaulting on pension fund contributions to their employees. It raises deeply alarming matters that cannot be left as yet another burden of life for workers to suffer through.

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THE Financial Sector Conduct Authority (FSCA) has released its latest report on employers defaulting on pension fund contributions to their employees. | File

(File)

Pension funds are workers' hard earned deferred wages. When employers, public or private, claim to be making them fail to do so, that is fraud and must be treated as the criminal offence it is. Worse is when employers deduct the employees' contribution and then pocket the money.

It is extremely worrying that the number of delinquent employers has seemingly doubled from just under 8 000 in the last FSCA report to over 15 500 in its most recent. This may be due partly to improved reporting since the advent of the Two Pot Pension Reforms initiated by the Congress of South African Trade Unions (Cosatu) came into effect in 2024.

Key findings of the FSCA include almost 600 000 employees are said to be owed R7.29 billion by employers with the largest number of culprits to be found in municipalities, auto industry and ironically the private security sector.

In many instances, these arrears are not a matter of months but years. This theft of workers' pension contributions is not merely a violation of the law but condemns these workers and their families to a life of absolute poverty and misery when they should be enjoying their retirement in comfort and security after decades of hard work.

It is a moral crisis as it is these workers whose blood and sweat has generated billions of rands profits for those companies and helped keep the economy afloat. Some 600 000 workers being robbed of their pension fund contributions further adds to an existing crisis where less than 10% of South Africans can afford to retire.

Most pensioners play a key financial role in supporting their families even when they are retired.