JOHANNESBURG - More than 600,000 workers are at risk of losing retirement and other pension benefits because their employers have failed to pay over pension fund contributions deducted from their salaries.
According to the Financial Sector Conduct Authority (FSCA), more than 6,000 employers owe over R8-billion in outstanding pension contributions, with municipalities among the worst offenders.
The regulator says the problem is worsening, with employers taking longer to pay what they owe.
FSCA spokesperson Keabetswe Tsuene warned that workers stand to lose far more than their retirement savings.
She said employees who resign or retire could receive reduced benefits because some contributions never reached their pension funds.
"It affects your withdrawal benefits. And to an extent, for those pension funds that offer risk benefits such as a death cover, funeral cover, and so forth, that is also affected.
"So in the event of an unfortunate death of the member, their beneficiaries could be affected because they probably won't get the death benefit cover, and that benefit that they're getting from the fund that they share or the contributions that have been contributed, they'd be affected as well," Tsuene said.
"So it is a very, very sad situation for our members."
Tsuene said the FSCA is working with the National Prosecuting Authority, the Directorate for Priority Crime Investigation (Hawks), National Treasury, the Auditor-General and the Department of Employment and Labour to improve enforcement and recover outstanding contributions.
"It's not consistent enough, but we're seen payments trickle in a bit regularly. And we're also sitting at every report; I believe we are using that avenue as well to speak to business and labour and see how we can assist each other," she said.
"So we are looking at various avenues. We now have the Department of Labour. Their labour inspectors will also be doing work on pension fund contributions."