Answer to a question from a reader

My employer didn't pay the money they deducted from my wages to the provident fund. Now what?

The short answer

You should send a registered letter to the Trustees of the Fund asking them to investigate.

The whole question

Dear Athalie

I have been working at the company for two and a half years. They deducted R375 from my wages but when I checked how much money is available in my provident fund, it said no contributions had been paid. What can I do?

The long answer

Unfortunately, failing to pay into a provident fund seems to have become a very common offence among employers – including the South African Post Office and the ANC. Muvhango Lukhaimane, the Pensions Fund Adjudicator (PFA) said that some 7,500 complaints of non-payment of contributions deducted by employers had been received by her office in the last year. These offences were primarily committed by employers in the security industry, municipalities, cleaning and transport. I note that your employer is in the security industry.

In 2014, the Pensions Fund Act was amended to provide for stricter penalties for employers who failed to pay over pension and provident fund contributions, and to make it a criminal offence for employers not to pay over the contributions deducted from their employees. Employers are required to pay over the contributions deducted from their employees to the pension or provident funds within seven days.

Smart About Money notes in their article that with the amendments to the Pension Funds Act in 2014, directors, members of a close corporation or the governing body of an employer, who are regularly involved in the company’s financial affairs, are personally liable for an employer's failure to pay contributions. An employer must provide the name of the director or member who is responsible for ensuring contributions are paid over. If the employer fails to notify the fund in writing, all directors and members of the close corporation or governing body responsible for financial affairs can be held liable for any failure to pay contributions.

The responsible person at an employer can be fined up to R10-million or imprisoned for up to 10 years for failing to pay over contributions. But, no employer has yet been jailed for this offence.

Clement Marumoagae, a law lecturer at Wits University, notes that Section 13A (7) of the Act provides that interest shall be payable on the amount of any contribution not transmitted or received by the fund or insurer as prescribed in s 13A (3) of the Act. This means your employer will be required to pay interest on any non-payments, late payments or short payments. 

He says that when employers failed to register such employees with the relevant pension fund but deducted contribution amounts from their salaries, the Pensions Fund Adjudicator (PFA) ordered the fund to compute the value of the withdrawal benefit that the employee member would have been entitled to, had he been a member of the fund and had the employer timeously made the pension contributions due in terms of the rules of the fund, and directed the employer to pay the employee the amount computed by the fund. This was done in the Mthimkulu case. He notes too that the PFA has also ordered some employers to register themselves and their employees with the funds, which they are mandated to register with. This was done in the Selebogo v The Private Security Sector Provident Fund (PFA) case.

Pension and provident funds are required by law to monitor the payments of contributions into the fund and to report to the trustees whenever contributions are not paid by the employer within seven days of the end of the month. The trustees must then inform the Financial Services Board (FSB) and also the member of the fund. The trustees should send the member a letter explaining how their benefits are affected by the employer’s failure to pay over the contributions. If the contributions are still outstanding after three months, the matter should be reported to the National Prosecuting Authority (NPA).

Section 30A of the Pensions Fund Act provides that a complainant may lodge a complaint with the fund for consideration by the board of trustees, which should be considered and replied to in writing within 30 days of receipt of the complaint. Further that if the complainant is not satisfied with the reply or there was no reply at all, then a complaint may be lodged with the office of the Pension Funds Adjudicator (PFA).

So, what should you do?

First, you should send a registered letter to the Trustees of the Fund asking them to check whether your contributions have been paid, and to take action if they have not. It is the duty of the Trustees of the provident fund to ensure that employers comply with the rules. If they do not do so, they are in breach of the fund rules themselves. You could send a copy of the letter to the employer and the HR person.

If you do not get a satisfactory answer from the provident fund within 30 days, you can complain to the Pension Funds Adjudicator (PFA). Include a copy of your letter to the fund and their reply in your complaint. The adjudicator's office will start by referring a complaint back to the fund to try and get it resolved internally before starting a formal adjudication process. This is because there are a very large number of complaints sent to their office. 

The Adjudicator gives the provident fund 30 days to reply, and then makes a decision. The problem is that it can take up to 15 months to get the Adjudicator’s reply as there is a very long waiting list.

These are the PFA’s contact details: or call 012 346 1738. 

You could also approach Legal Aid to assist you. They are a means-tested organisation that must assist people who cannot afford a lawyer.

Here are their contact details:

You could also contact the Black Sash for free paralegal advice: 

  • Black Sash

  • Helpline for free paralegal advice: 072 663 3739

Wishing you the best,

Answered on Jan. 17, 2023, 11:40 a.m.

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