Employers withholding pension contributions harm 300 000 workers, depriving them of retirement savings, funeral, and disability benefits.
You can’t actually believe that there are people out there like this, but some employers deduct pension fund contributions from employees but fail to pay it over to pension funds.
It is, as the standing committee for finance in parliament said, that these employers are committing a “serious crime against humanity”.
According to the committee, “employers’ arrears payments amount to R5.2 billion, excluding umbrella funds and late payment interest, with 7 770 employers who are in arrears with payments to 51 pension funds, affecting more than 300 000 employees”.
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That the employees found out about this was due to them seeking to withdraw from the savings pot under the two-pot retirement system, only to find that there was no money available.
The committee heard the main problem areas are the private security industry, in which 2 379 employers are in arrears and municipalities, where 149 local authorities owe money.
The failure to pay has far-reaching consequences as those pension fund members affected are unable to receive their funeral and disability benefits because the insurers responsible will not honour the claims if the employers do not pay the contributions. Sadly, it’s always the little people that suffer.
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