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Thread: Pension Fund Contributions deducted but not paid over

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    Pension Fund Contributions deducted but not paid over

    Good Evening,

    I am seeking advice on the possible way forward.
    My employer has been deducting pension contributions from the employees but has not been paying it over to the pension fund administrators nor submitting the deduction lists. the last contributions paid over was september 2019.

    Ive joined the company in Jan 2020 to date. Ive also been deducted pension ever since Ive joined the company.

    I recently found out that I was not registered with the fund though monthly contributions have been deducted. How best can I address this matter?

    We are now faced with retrenchments. The Pension fund administrators are willing to receive the monthly members contribution list to update the Fund/system.

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    In RSA the BCEA requires that deductions in respect of retirement funding gets paid to the retirement funding company or organisation by the 7th day following the month for which payment has been made. This is usually the 7th of the next month. So, failure to make the payment means the company is in contravention of at least that Act.

    Normally pension funds are also group life funds which is somewhere between 3 and 5 years salary as cover. This means that should an employee lose his or her life while performing their duties, the retirement fund will probably reject the claim which means the the employee's estate will have a claim against the company, potentially sinking the company.

    It is actually a potentially huge issue, but the crux of the matter is that the employer has deducted monies, which it held in trust, and has not paid these over.

    I really would consult a labour specialist or a Union person if there is one, or else an attorney. I personally would not approach the company, especially in these times and under those circumstances, myself.

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    Thank you Adromeda...I think I should consult a labour specialist for now. Your response much appreciated.

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    Site Caretaker Dave A's Avatar
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    In South Africa, the employer is in contravention of Section 13A of the Pension Funds Act. The consequences per the Act are severe and failure to pay over contributions was recently criminalised, although getting the full might of the law to pursue a criminal prosecution is as yet to happen a.f.a.i.k.

    Report the matter to your pension fund administrator or Principal Officer. They have statutory obligations to report and pursue the matter.
    If they are unresponsive, lay a complaint with the Pension Funds Adjudicator.

    I know that the Namibian legislation is similar to SA, but there may be differences that count. Still, report the matter to your pension fund. They are obliged to assist you.

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