{"id":14675,"date":"2026-01-22T13:34:26","date_gmt":"2026-01-22T13:34:26","guid":{"rendered":"https:\/\/microvibenews.com\/?p=14675"},"modified":"2026-01-22T13:34:26","modified_gmt":"2026-01-22T13:34:26","slug":"employers-face-tougher-enforcement-for-late-pension-fund-contributions","status":"publish","type":"post","link":"https:\/\/microvibenews.com\/?p=14675","title":{"rendered":"Employers face tougher enforcement for late pension fund contributions"},"content":{"rendered":"<p><\/p>\n<div id=\"textFreeArticle\">\n<p><iframe loading=\"lazy\" src=\"https:\/\/iframe.iono.fm\/e\/1637777?layout=modern\" width=\"100%\" height=\"170\" frameborder=\"0\" data-mce-fragment=\"1\"><\/iframe><\/p>\n<p>You can also listen to this podcast on iono.fm here.<\/p>\n<p><strong>J<\/strong><strong>EREMY MAGGS:<\/strong> Pay late and the consequences just got a lot more serious for employers. A quiet regulatory change in January now means late or unpaid benefit fund contributions can trigger action from both labour inspectors and financial regulators, with criminal liability \u00a0firmly on the table.<\/p>\n<p>I want to discuss what has changed, why it matters, and what employers need to do right now. In that respect, from the law firm Webber Wentzel, I\u2019m joined by partner Nicolette van Vuuren. Nicolette, a very warm welcome.<\/p>\n<p>What exactly has changed this month and why is this a bigger deal than many employers maybe realise?<\/p>\n<p><strong>NICOLETTE VAN VUUREN: <\/strong>We\u2019ve always had, from a pension fund perspective, regulation from the Financial Sector Conduct Authority (FSCA). Although they didn\u2019t have actual regulation over the employers, they could name and shame, they went to court to get personal liability for directors in instances where there was arear contributions.<\/p>\n<p>Listen\/read:\u00a0FSCA cracks down on over R5bn in unpaid pension fund contributions [2025]<\/p>\n<p>But what has changed now is that the Minister of Labour (Nomakhosazana Meth) has actually now made section 34A of the Basic Conditions of Employment Act applicable to employers who contribute to retirement funds that are governed by the Pension Funds Act.<\/p>\n<p>What that means is that they are now making sure that contributions are paid over within a certain period.<\/p>\n<p>That being seven days after the deduction from members, and if the employer is making a contribution, seven days after the month in which they are due. So now the inspectors from a labour perspective are going to have regulatory authority over those employers, where in the past they haven\u2019t had that.<\/p>\n<div class=\"visible-sm-block visible-xs-block m1010\">\n<div class=\"ad-container-wrapper\">\n<p>ADVERTISEMENT<\/p>\n<p>CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n<p><strong>JEREMY MAGGS: <\/strong>What drove the decision, do you think, to change this? Where were employers being tardy and was it a widespread problem?<\/p>\n<p><strong>NICOLETTE VAN VUUREN: <\/strong>Look, we\u2019ve seen, basically in the private security sector, that employers haven\u2019t been paying contributions over.<\/p>\n<blockquote>\n<p>From when the two-pot system came into being, members actually started seeing that these contributions hadn\u2019t been paid over because they wanted to withdraw and they couldn\u2019t because they were arrear contributions.<\/p>\n<\/blockquote>\n<p>So to make sure that there was more regulation over employers, I know the EFF (Economic Freedom Fighters) went and approached the minister, and based on meetings that they\u2019ve had, and the minister has now decided to make sure that section 34A is now applicable.<\/p>\n<p><strong>JEREMY MAGGS: <\/strong>Nicolette, the seven-day payment rule sounds simple, but the trigger dates, as I read it, can differ. Where do you think employers then are most likely to trip up in practice?<\/p>\n<p><strong>NICOLETTE VAN VUUREN: <\/strong>In terms of the Pension Funds Act, they have to pay over within seven days after the month in which the contributions are due. In other words, if they are due for the month of January, they\u2019ve got to pay by 7 February.<\/p>\n<blockquote>\n<p>With this new amendment, once they deduct from the employee\u2019s salary, they have seven days to pay over.<\/p>\n<\/blockquote>\n<p>If your payment date is the 25th of the month, they have seven days from the 25th of the month, whereas if there\u2019s only an employer contribution, in other words they\u2019re not deducting from the salary, they can pay within seven days from the end of the month.<\/p>\n<blockquote>\n<p>I think that is going to be the problem. It sounds minuscule, the time period, but I think that is where the problem is going to come in.<\/p>\n<\/blockquote>\n<p>They\u2019re going to deduct those contributions and in employers\u2019 minds they may think that they only have seven days from the end of the month to pay over, whereas that period may be shorter because they deducted before the end of the month.<\/p>\n<div class=\"visible-sm-block visible-xs-block m1010\">\n<div class=\"ad-container-wrapper\">\n<p>ADVERTISEMENT:<\/p>\n<p>CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n<p><strong>JEREMY MAGGS: <\/strong>There\u2019s now dual enforcement as far as this is concerned, but as in everything, is there the capacity to actually exercise that and make sure that people are complying with the law?<\/p>\n<p><strong>NICOLETTE VAN VUUREN: <\/strong>Yeah, I think from a labour perspective we do see compliance orders issued often. I think if a member or an employee reports it to the Department of Labour, I think we are going to see regulation from the Department of Labour.<\/p>\n<p>Read:<br \/>Companies owe pension funds more than R6bn in contributions [2023]<br \/>FSCA to clamp down on failing pension fund trustees [2025]<\/p>\n<p>From the FSCA point of view, I think they can just really carry on doing what they have been doing, which is basically naming and shaming. Funds could get more involved and approach the courts to enforce personal liability against directors.<\/p>\n<p>But I do think we\u2019re going to see more from a labour perspective, where the inspectors are now going to start issuing compliance notices.<\/p>\n<p><strong>JEREMY MAGGS: <\/strong>Directors and senior managers can now be personally liable. What does it mean, then, for boards and executives who assume often that payroll is someone else\u2019s problem?<\/p>\n<p><strong>NICOLETTE VAN VUUREN: <\/strong>Yeah, that\u2019s quite a good question. We saw last year the High Court in Cape Town issued a judgment where the directors were held personally liable.<\/p>\n<p>Read:<br \/>Pay pensions over, or \u2026 [2025]<br \/>Beyond products: New legislation puts focus back on clients, not just their money [2025]<br \/>Cofi bill to target rogue employers behind unpaid pension contributions [2025]<\/p>\n<p>In fact, the defences that those directors used were, well, we actually only oversee the company, we don\u2019t get involved in the management of the financial affairs. But the court said, well, you\u2019re a director, you should be overseeing every aspect of the business and therefore you are personally liable.<\/p>\n<p>The courts are really not taking any excuses from directors. They\u2019re saying you\u2019re managing and overseeing it therefore, you are personally liable.<\/p>\n<div class=\"visible-sm-block visible-xs-block m1010\">\n<div class=\"ad-container-wrapper\">\n<p>ADVERTISEMENT:<\/p>\n<p>CONTINUE READING BELOW<\/p>\n<\/p><\/div>\n<\/div>\n<p><strong>JEREMY MAGGS: <\/strong>What are the worst-case consequences that employers then should understand; whether it\u2019s criminal sanction or even fines?<\/p>\n<p><strong>NICOLETTE VAN VUUREN: <\/strong>From an FSCA perspective, the Pension Funds Act does have severe consequences. We don\u2019t really see those happening in the industry at the moment.<\/p>\n<p>Criminal charges can be laid and the FSCA is taking a different approach, they would rather work with employers to ensure that the members are in a good position and their interests are protected, rather than issuing fines that the employer probably can\u2019t afford in any event.<\/p>\n<p>Read:<br \/>Pension fund arrears, poisonings, data gathered \u2013 and then? [2025]<br \/>South African pension arrears surge 40% to R7.29bn [2025]<\/p>\n<p>We haven\u2019t really seen those fines issued. There are fines of up to R10 million and imprisonment, but the FSCA is rather working with the employers to ensure that the members have those amounts and the benefits in their retirement savings.<\/p>\n<p><strong>JEREMY MAGGS: <\/strong>If you had to recommend one immediate action to employers this week to reduce risk, what would it be?<\/p>\n<p><strong>NICOLETTE VAN VUUREN: <\/strong>Diarise and make sure that your payroll systems are properly implemented to ensure that those contributions are paid over within the seven days of deducting them from members.<\/p>\n<p>Ordinarily they would have paid them over within the seven days after the end of the month. But I think that is where the critical aspect is going to come in, that employers need to pay over within seven days from deducting.<\/p>\n<p><strong>JEREMY MAGGS: <\/strong>Nicolette van Vuuren from Webber Wentzel, thank you very much indeed. I appreciate your time.<\/p>\n<p><em>Follow Moneyweb\u2019s in-depth finance and business news on WhatsApp here.<\/em><\/p>\n<\/p><\/div>\n<p><script data-cfasync=\"false\">\n            !function(f,b,e,v,n,t,s)\n            {if(f.fbq)return;n=f.fbq=function(){n.callMethod?\n                n.callMethod.apply(n,arguments):n.queue.push(arguments)};\n                if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version='2.0';\n                n.queue=[];t=b.createElement(e);t.async=!0;\n                t.src=v;s=b.getElementsByTagName(e)[0];\n                s.parentNode.insertBefore(t,s)}(window, document,'script',\n                'https:\/\/connect.facebook.net\/en_US\/fbevents.js');\n            fbq('init', '779812924991616');\n            fbq('track', 'PageView');\n        <\/script>#Employers #face #tougher #enforcement #late #pension #fund #contributions<\/p>\n","protected":false},"excerpt":{"rendered":"<p>You can also listen to this po&hellip; <\/p>\n","protected":false},"author":1,"featured_media":14676,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[4],"tags":[9984,7417,5963,752,137,3744,88,9101],"_links":{"self":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/14675"}],"collection":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14675"}],"version-history":[{"count":0,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/14675\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/media\/14676"}],"wp:attachment":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14675"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14675"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14675"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}