More companies are failing to hand over the pension contributions of their workers with more than R8bn owed to retirement fund administrators.
The Financial Sector Conduct Authority (FSCA) said the number of defaulting companies has tripled since 2023, from 5,430 to 16,556 in February this year. The number of owed fund administrators escalated from 23 in 2023 to 75 by this year, said the FSCA.
“Total arrears are estimated to be R8.33bn, affecting about 590,000 retirement fund members. This represents an increase of R1.04bn (14.2%) from the R7.29bn reported as at March 31 2025. Notably, late payment interest accounts for 43.5% of total arrears,” said the regulator.
“Current data suggests the severity of arrears is increasing, with late payment interest increasing by 21.5%, compared with a 9% increase in the capital portion of arrears. This indicates outstanding contributions are remaining unpaid for longer periods and continuing to accumulate interest.”
Not paying over pension contributions of employees to administrators is a criminal offence.
The FSCA said municipalities account for 21.5% of total arrears, while those participating in bargaining council funds contribute 76.9%.
“Arrears by municipalities in the North West and Free State remain the most significant within the local government sector, collectively accounting for 79.4% of all municipal arrears,” said the FSCA.
It said interventions by the National Treasury to withhold equitable share allocations from persistently non-compliant municipalities have begun to improve the regularity of contribution payments.
“This underscores the value of continued inter-agency collaboration in addressing arrear contributions and protecting retirement fund members,” said the FSCA.
The regulator said it will continue to collaborate with other entities such as the auditor-general, National Treasury, the National Prosecuting Authority and the Directorate for Priority Crime Investigation to strengthen enforcement to protect workers.
Since the FSCA’s first publication of defaulting employers, total recoveries are reported to have reached R1.01bn, about 12.1% of the estimated arrears.
“More than 200 employer records have moved into a more favourable compliance position since the previous publication in September 2025. This includes full or partial settlement of arrears, settlement arrangements, or voluntary termination after business closure.”
Members who are concerned their pension fund contributions may not have been paid should contact their employers and pension funds directly to confirm the status of their contributions. If members are still concerned, they can contact the FSCA.
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