Pension fund contributions overlooked by employers in South Africa
As of March 31, 2025, the Financial Sector Conduct Authority reported that over 15,500 employers were in contravention of the Pension Funds Act, with total arrears estimated at about R7.29 billion.
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Some employers in the nation have a concerning tendency to deduct employees' pension contributions without transferring the funds to the pension fund account.
This is against the law and unethical. When the sun sets, workers depend on this hard-earned money to get by.
A few years ago, the African National Congress came under fire for failing to make contributions to workers' pension funds.
The sheer scale of this problem is deeply troubling. As of March 31, 2025, the Financial Sector Conduct Authority reported that over 15,500 employers were in contravention of the Pension Funds Act, with total arrears estimated at about R7.29 billion.
Another ongoing concern involves calls for the Gauteng Health Department to sanction Mafoko Security Patrols. According to reports, this hospital security company has not paid the provident funds that it has collected from its employees.
According to Zwelinzima Vavi of the South African Federation of Trade Unions, the security firm has disregarded hundreds of complaints by its security guards that money deducted from their wages has not been paid into a provident fund.This company has several contracts to guard Gauteng hospitals, including a R58 million a year contract for 206 guards at the George Mukhari Hospital.
The Ga-Rankuwa High Court has found in favour of workers concerning determinations by the Pension Funds Adjudicator on the pay-over of provident fund money.
Estimates put the contribution amount owed to workers by Mafoko between R111 million and R330 million.
The law is unequivocal on this matter. Section 13A of the Pension Funds Act requires employers to pay member contributions to a retirement fund, with non-compliance potentially leading to criminal sanctions, including fines and imprisonment. Beyond legal requirements, the retirement contributions — which provide employees with a regular monthly pension after they stop working — represent a moral commitment.
But the issue goes beyond respecting the law. The retirement contributions provide income to employees, usually in the form of a regular monthly pension after they stop working.
We urge all offending companies to comply with the law immediately and ensure these funds are paid over. Beyond legal compliance, it is a moral obligation to ensure that thousands of families retain the financial security provided by these retirement savings once the primary earner ceases work.