A significant number of people realised in September 2024 with the implementation of two-pot retirement system that their employers have not been paying all pension fund contributions to funds in terms of Section 13A of the Pension Funds Act (“the Act”). Section 13A of the Act states that employers must pay contributions to pension funds by the 7th day of the month following the month for which the contributions are due. However, some employers are not compliant with this section. It is also the duty of funds to report on the non-compliance of the employers. It is also the responsibility of the fund members to request and check their benefit statements, at least annually, to monitor if the employer is paying contributions to the fund monthly or weekly depending on the fund rules and check if contributions are paid at the correct rate.
Most fund members do not monitor the employer’s compliance for years and when they approach funds to claim their savings withdrawal, they realise that their employers have not been paying pension fund contributions to the fund on their behalf. In some cases, when they approach the Adjudicator, they find that their complaints are time barred or have prescribed which means the Adjudicator cannot investigate them. Section 30I of the Act, states that the Adjudicator shall not investigate a complaint if it happened more than three years before the matter is submitted to her in writing and provisions of the Prescription Act, 1969 (Act No. 68 of 1969) apply when calculating the three years.
In terms of section 12(1) of the Prescription Act, prescription starts to run as soon as the debt is due. Section 12(3) provides that a debt shall not be deemed to be due until the creditor has knowledge of the identity of the debtor and of the facts from which the debt arises, provided that a creditor shall be deemed to have such knowledge if he could have acquired it by exercising reasonable care.
Therefore, by exercising reasonable care, fund members must check their benefit statements and payslips regularly. Members must be provided with a benefit statement, at least once a year. The payslips reflect the pension fund deduction, and the benefit statement reflects the amount paid to the fund by the employer. So, by comparing the two, fund members will be able to verify if contributions are made at the correct rate. The payslip can also alert fund members that the employer is non-compliant, as sometimes the employer does not deduct contributions. A reasonable person would be alarmed by the failure of the employer to deduct pension funds from their salaries for certain months. This will allow members to take appropriate steps in time to exercise their rights and protect their benefits, especially in relation to prescription of claims. The Adjudicator uses this type of information to determine time barring. Therefore, it is important for the fund members to ensure that they receive their benefit statements annually and check provident fund deductions from their payslips.
