- Employers who do not pay pension fund contributions can be held personally liable for the debt, according to MIBCO.
- A recent Financial Services Tribunal decision confirmed that employers bear the legal and financial risk if pension contributions are not paid.
- MISA encourages workers to check if they are owed pension benefits, severance pay, unpaid wages or other outstanding entitlements.
Motor industry employers who fail to pay over workers’ retirement fund contributions can be held personally liable and may be required to settle the money themselves.
That is the warning issued by Motor Industry Bargaining Council (MIBCO) General Secretary Paulos Masemola during a recent episode of MISA TV, a warning that the Motor Industry Staff Association (MISA) says every worker in the sector should take seriously.
The warning comes against a backdrop of billions of rand in unclaimed financial assets across South Africa. According to information cited by MISA, approximately R88 billion in financial assets remains unclaimed nationally. The motor industry accounts for a significant share of those funds.
The unclaimed money includes pension benefits, severance packages, arrear wages, death and ill-health benefits, as well as Additional Holiday Pay and other employment-related entitlements.
According to MISA, many workers are unaware that money is owed to them because they changed jobs, changed contact details or were never informed that the benefits existed.
MIBCO takes action against non-compliant employers
Masemola said MIBCO is using provisions of the Pension Funds Act and its own enforcement processes to recover outstanding contributions.
“The Pension Funds Act prescribes that we can open cases at the SAPS, which is something we are embarking on,” said Masemola.
“But through our processes as well, we encourage employers, because we started a process where we are holding employers personally liable, which is supported by the Pension Funds Act, to collect those pension fund contributions.”
Masemola said the process is aimed at ensuring that contributions deducted from workers are paid over to the relevant retirement funds.
Tribunal ruling highlights employer responsibility
MISA said a recent Financial Services Tribunal ruling found that employers carry the legal and financial risk when retirement fund contributions are not paid.
The ruling is particularly significant where a worker dies or becomes disabled while contributions are in arrears.
According to MISA, the Motor Industry Retirement Funds include insurance benefits that provide a lump-sum payment equal to three times a worker’s annual salary if the worker dies or becomes disabled while employed. However, that insurance cover depends on contributions being paid.
MISA said the cover lapses when an employer stops paying contributions, in the same way that an insurance policy lapses when premiums are not paid.
Where a worker dies or becomes disabled during that period, the worker’s family may lose access to the lump-sum benefit.
MISA urges workers to check benefits owed to them
MISA Chief Executive Officer: Operations Martlé Keyter said workers should establish whether they are owed money. “This money belongs to workers. It was earned through their labour, and no employer has the right to withhold it,” said Keyter.
“We urge every member to check what they are owed, and we welcome MIBCO holding non-compliant employers personally accountable.”
MISA said workers can claim benefits owed to them even if they have changed employment, moved residence or changed contact details.
The organisation has encouraged workers to investigate whether they have unclaimed pension benefits or other employment-related entitlements that remain outstanding.
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