Today's Labour News

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FSCABusinessLive reports that the Financial Services Conduct Authority (FSCA) is preparing for a number of distressed employers to default on their contributions to retirement funds due to the Covid-19 pandemic and the nationwide lockdown.  

It has urged funds to register necessary amendments to their rules to deal with such non-payments.  The FSCA issued a statement on Friday saying the financial challenges brought about by the crisis meant certain employers and employees would be unable to pay their full or, in some cases, any contributions to their retirement funds.  The FSCA’s Olano Makhubela commented that it was difficult to tell how widespread the issue would be, as the FSCA had not yet received actual requests for rule amendments and some funds already had the necessary rules to deal with defaults.  However, the FSCA had received several queries from organisations such as the Institute of Retirement Funds Africa and large institutions, which indicated that employers were experiencing financial challenges.  In terms of the Pension Funds Act (PFA), employers are liable to pay full contributions due to retirement funds by no later than seven days after the end of the month in which they are due.  In cases in which employers have made formal requests to their retirement funds for the suspension or reduction of contributions, the board of trustees of the fund must consider the employer’s circumstances and apply the fund rules.

  • Read the full original of the report in the above regard by Neesa Moodley at BusinessLive

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