What can I do if my employer hasn't submitted my provident fund claim forms and is avoiding me?

The long answer

You should receive your provident fund payout within 21 days if your tax affairs are in order and all the required documents (such as a copy of your ID, a completed instruction form stating where the money should go, and proof of banking details) have been sent to the fund by your employer. 

Your employer is legally obliged to submit the completed claim firms to the fund administrator. You need to find out whether your employer has signed and submitted your claim form to the fund. You can ask the Human Resources (HR) person if your claim form has been submitted to the fund. You can also ask the HR person for the name of the fund and the contact details of the fund administrator. You should also ask for a copy of the fund rules so that you know your rights and what you should get as retrenchment benefits.

The Registrar of Pension Funds also provides a central database on the Financial Sector Conduct Authority (FSCA) website to help people to see if there are unclaimed benefits due to them using the FSCA search engine. You have to input the following basic information into the Unclaimed Benefits Search Engine: name, ID, fund name, name of employer, for the search engine to check if there is a possible match. If there is a successful match, you will be provided with the contact details of the fund and/or the fund administrator.

You can contact the fund administrator with your details and check whether the claim form has been submitted. If it has not been submitted you should send a registered letter to the Trustees of the Fund informing them that your employer has not submitted your claim form and they need to take it up. It is the duty of the Trustees of the provident fund to ensure that employers comply with the rules. If they do not do so, they are in breach of the fund rules themselves. You could send a copy of the letter to the employer and the HR person.

If you do not get a satisfactory answer from the provident fund within 30 days, you can complain to the Pension Funds Adjudicator (PFA), including your letter to the fund and their reply. The Adjudicator gives the provident fund 30 days to reply, and then makes a decision. The problem is that it can take up to 15 months to get the Adjudicator’s reply as there is a very long waiting list.

You can contact the Adjudicator here: enquiries@pfa.org.za 

Muvhango Lukhaimane, the Pension Funds Adjudicator, said that most of the complaints lodged at her office were about employers who fail to pay contributions. Last year, she got more than 7,500 complaints, mainly in municipalities and in the security, cleaning and transport sectors.

In cases where the employer had deducted contributions from an employee’s salary but had not paid them over to the provident fund, the Adjudicator ordered the fund to calculate the amount of the benefit that should have been paid and directed the employer to pay that amount to the employee. Since 2014, when the Pensions Fund Act was amended, it has been a criminal offence for employers not to pay deductions from their employees’ salaries to the pension or provident fund because it means that the members of the fund do not get the benefit they are owed. But sadly, there has not yet been a single case of an employer being jailed for this criminal offence.

Pension and provident funds are legally required to monitor the payments of contributions into the fund and to report to the trustees when contributions are not paid by the employer within seven days of the end of the month when they are due. The trustees are then legally obliged to inform the Financial Services Board (FSB) and also the member of the fund. The trustees should send the member a letter explaining how their benefits are affected by the employer’s failure to pay over the contributions. If the contributions are still outstanding after three months, the matter should be reported to the National Prosecuting Authority (NPA).

Wishing you the best,
Athalie