Rogue employers face law

CHANGES: COFI BILL TO TARGET BUSINESSES BEHIND UNPAID PENSION CONTRIBUTIONS

- Liesl Peyper

South African consumers are expected to benefit from stronger protection, clearer communication and fairer treatment once the long-awaited Conduct of Financial Institutions (Cofi) Bill comes into force.

The legislation, which forms part of government's Twin Peaks regulatory reforms, aims to bring all financial institutions under a single conduct framework.

Under the new system, oversight will be divided between:

Webber Wentzel partner Nicolette van Vuuren says the Bill will prioritise member protection by addressing unreasonable barriers that could prevent them from switching financial products or services.

"For pension fund members in particular, there will be stricter requirements on funds to communicate any issues with contributions," Van Vuuren notes.

She adds that there should also be greater financial stability in retirement funds thanks to the Prudential Authority's oversight.

'Rogue employers'

The FSCA has for the past two years published the names of so-called rogue employers who collect retirement fund contributions from their employees but fail to pay them over to the actual fund.

At the end of September, the regulator again released a list of employers that had failed to transfer employees' pension fund contributions to the appropriate funds.