What are the statutory duties of a fund?
A registered fund or its board of management has certain statutory duties in terms of the Act and the Regulations to the Act in relation to payment of contributions. Most importantly a fund or its board has a duty to request an employer in writing to notify it of the identity of persons personally liable for payment of contributions in terms of section 13A(8) of the Act and to report any non-compliance with the provisions of section 13A in accordance with such conditions and the format as may be prescribed (Section 13A(10) and Regulation 33(4)(b)). FSCA Conduct Standard 1 of 2022, inter alia, requires a fund to notify every employer prior to commencement of participation and on annual basis of the employer’s duties and liability under section 13A. The Conduct Standard also requires the board of a fund to notify affected members of any material contravention or failure of an employer to pay contributions, within 30 days of being informed of such failure. This will assist employers and members of their rights and obligations regarding payment of contributions.
Fund duty to the members
In most cases, members of funds only become aware of non-payment of contributions upon exit from service or when payment of a benefit is made. Thus, a fund must take reasonable steps to inform members of any non-compliance by an employer regarding payment of contributions (Regulation 33(4)(a)). It is common practice for funds to send communication to employers when notifying members of issues affecting them, including provision of annual benefit statements. These communication do not reach the members as, in most cases, the employers do not distribute same. It remains the duty of the fund to ensure direct communication with members and that any communication sent through the employer reaches them.
A fund must also allocate contributions correctly to the member’s record and ensure that proper books and records are kept (Section 7D(a)).
Employer Duty
A participating employer in a fund has a statutory duty to pay contributions to a fund which, in terms of the fund rules, is to be deducted from the member’s remuneration and any contributions for which it is liable in terms of the rules (Section 13A(1)). It also has a duty to submit contribution schedules in support of the contributions made in order for the fund to allocate same accordingly (Section 13A(2)(a)). The contributions must be paid to the fund no later than seven days after the end of the month for which such a contribution is payable. A defaulting employer is liable to pay late payment interest on contributions not paid timeously (Section 13A(7)).
Complaints to the OPFA show that employers do not register all their employees with funds despite deducting contributions from their salaries. Further, some employers do not pay contributions timeously, submit schedules or the amount of contributions paid is not at the correct rate as prescribed by the fund rules.
What can members do?
Members of funds must regularly monitor the deductions made from their salaries in respect of retirement fund contributions. The amount that is deducted from a member’s salary as contributions must be in accordance with the rules of the relevant fund and must be remitted to the fund on a weekly/monthly basis (depending on the rules) (Section 13A(3)(a)). Members must famialiarise themselves with the fund rules and may request a copy from the relevant fund.
Members must regularly check their benefit statements and ensure that they receive same on an annual basis. A benefit statement contains vital information such as membership date with the fund, the amount of contributions made by the member and the employer, deductions from the contributions in respect of costs and the current fund value.
What are the appropriate steps? A member, former member or a beneficiary who is aggrieved with the failure of the employer to pay contributions may lodge a written complaint with a fund for consideration by the board (Section 30A(a)). A complaint so lodged shall be properly considered and replied to in writing by the fund or the employer within 30 days of receipt. If the member is not satisfied with the reply or if the fund or the employer fails to reply within 30 days, the complainant may lodge a complaint with the OPFA.
Our role
In a complaint relating to non-payment of contributions, the role of the OPFA is to investigate and determine if an employer is non-compliant in terms of the fund rules and the Act. During the investigation phase a fund is expected to inform the OPFA of the period and amount of arrear contributions together with late payment interest.
ABOUT THE PENSION FUNDS ADJUDICATOR
The Office of the Pension Funds Adjudicator (OPFA) is a statutory body established to resolve disputes in a procedurally fair, economical and expeditious manner. The adjudicator’s office investigates and determines complaints of abuse of power, maladministration, disputes of fact or law and employer dereliction of duty in respect of pension funds. The OPFA is situated in Pretoria, Gauteng.
For general enquiries or to lodge a complaint visit www.pfa.org.za, call 012 346 1738 or email Enquiries@pfa.org.za
