Can my provident fund account be blocked if I didn't finish the last few days of my notice period?

The long answer

An employer can ask the provident fund to deduct money from your provident fund, but only under certain conditions.

Section 37 of the Pension Funds Act says that even if the employer claims an amount in damages that a worker has caused to the employer through theft, fraud, dishonesty or misconduct, the fund can only deduct money from the member’s benefit if the member has admitted liability in writing and agreed to the amount of damages, or if a civil court has found that the employer is entitled to specific damages, or if a criminal court judgment has been obtained against the member. In the case of a criminal judgment, the employer also has to apply for a compensatory order from the court for damages to be paid. All this must be submitted to the fund by the employer before the fund will consider any deductions or withholding of the member’s benefit.

In other words, only if you sign an agreement that you are responsible for damages and you agree to pay the employer an agreed amount, can the fund deduct this amount from your benefit and pay it over to your employer.

Your employer is legally required to sign your withdrawal notification form to prove to the provident fund that you no longer work there and to indicate if you resigned or retired. If he wishes to make a case against you, the employer must indicate on the form that he has opened a legal case against you and ask for the fund to delay payment of your benefits until the case is settled. Only if the court decides in favour of the employer and makes a court order can the provident fund deduct the amount from your benefit.

The Pension Funds Act says that an employer must open a legal case within a reasonable amount of time, or at most three months after the date of withdrawal. If no court case is opened within this time, the provident fund must pay the member their benefit.

If there is no dispute and you are simply unable to get a form from the employer or the human resources department, you can approach the provident fund yourself with an affidavit giving the date of your resignation and that your employer refuses to provide you with a withdrawal form. If you bring all the documents needed, like a certified copy of your ID and bank statement, they will accept a form that you fill out and sign, and will contact your employer themselves to get his signature, or the Board of Management of the Fund will instruct the fund administrator to simply pay out your benefits. If your tax affairs are in order, you should be paid out within 14 to 21 days.

If the fund does not pay you, you can lay a complaint with the Pensions Fund Adjudicator. 

The adjudicator's office investigates and decides complaints of abuse of power, maladministration, disputes of fact or law and employer dereliction of duty concerning pension and provident funds. They will start by referring a complaint back to the fund to try and get it resolved internally before starting a formal adjudication process. This is because there are a very large number of complaints sent to their office. A lot of them are to do with a pension fund simply agreeing to what the employer claims rather than doing the work of investigating.

In terms of Section 37D(b)(ii) of the Pension Funds Act, the trustees of the pension or provident fund must weigh up the rights of both the member and the employer when considering whether the provident fund can be withheld or deductions made from it. 

The Office of The Pension Funds Adjudicator is in Pretoria, Gauteng. You can contact the office for general enquiries or to lodge a complaint at www.pfa.org.za or call 012 346 1738.

Wishing you the best,
Athalie