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​Pension-Power or Pension-Puddle ​​

By Khayalakhe Ndlovu, Consumer Education Analyst, FSCA


​You might be diligently contributing towards your pension or provident fund, but do you know if your employer is paying over your contributions to the retirement fund?

Retirement funds are amongst the most important social security initiatives in the South African social structure. Retirement benefits determine the living standard of millions of South Africans when they retire, and they play a vital role in the country’s economic sustainability. Retirement benefits play a pivotal role in most people’s financial security at retirement. The lack of retirement benefits increases not only the burden on the state but adds to the cycle of poverty. When a person retires from employment, he or she still has a desire to maintain the same standard of living that existed during his or her working life even, compensating for the impact of inflation.

Contributions to retirement funds are a typical way in which most employed South Africans invest their money. Some private and government companies in South Africa have made it compulsory for their employees to contribute to a retirement fund. The employee will have access to his or her retirement benefit when they retire, resign, are retrenched, dismissed or when they change jobs.

Are you certain that your employer is investing your pension or provident contributions towards the retirement fund?  

With the onset of COVID-19 and the subsequent lockdown measure, some employers have been battling to cover their portion of their employees’ retirement fund contribution.  To this end it is important that members of retirement funds are vigilant and be in regular contact with their Human Resource Departments and retirement fund administrators to ensure that all contributions are paid and properly invested. 

The FSCA regulations require that your retirement fund must issue you with a benefit statement no later than six months after their financial year end at least once a year. Should you not receive the statement, it becomes your responsibility as a member of a retirement fund to find out who administers your pension or provident contributions and to request a benefit statement from them. The benefit statement will give you an accumulate contribution amount and an indication of how much money has been invested in the fund. It is also important to speak to your payroll department, to explain retirement fund deductions on your pay slip to you. 

Your retirement fund contributions are divided into two parts:

1. the employee’s contribution which will reflect on your pay slip as a deduction; and 

2. your employer’s contribution which may also reflect on your pay slip but will not be included in your gross salary.

It is important to understand and be well informed about your retirement fund contributions. As per the complaints received by the Office of the Pension Funds Adjudicator (PFA), some employers have been found to be deducting money from their employees’ salaries but failing to contribute the money to the relevant retirement funds. This regulatory non-compliance with section 13A of the Pension Funds Act makes up, the majority of complaints received by the Office of the PFA and are predominantly received from the private security sector, cleaning and transport sectors and municipalities (PFA, 2019/2020). The issue of employers not paying employees’ pension or provident contributions to the retirements funds has received more and more attention in South Africa over the past three years but given the added financial strain of the pandemic this non-compliance will need urgent attention going forward. 

The non-payment of your retirement contributions into the fund may result into non-payment of retirement benefits; and the inability to finance your living standard at retirement and thus you will have to rely on the state. It has also become the employee’s responsibility to find out from the fund administrator if their employer is making monthly contributions into their retirement fund. To avoid the disappointment of the unavailability of funds at retirement you need to take control and contact your retirement fund and request your benefit statement today! 

What recourse do you have as an employee?

If your employer fails to pay your retirement fund contributions into your company retirement fund, it is a common law crime, and you have the following options available to you: 

  • Open a case of theft at your nearest South African Police Services (SAPS)
  • Lodge a formal complaint with the Office of the Pension Funds Adjudicator (PFA), call 086 066 2837, email:​  or visit​ 
  • Contact the FSCA on 012 428 8000/0800 20 3722, email: or visit​ 
  • For Government employees: Contact the Government Employee Pension Fund (GEPF) on 0800 117 669, email:​  or visit 
  • It is your right as a consumer to make enquiries about your pension information. Do not sit back and leave it to our employers to manage our hard-earned money. However, if you do not ask questions and make enquiries regarding your pension you may end up in tears in your old age, with little money to live on. 

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