R8.3 billion in pension funds missing in South Africa
Recent data shows that R8.3 billion in pension funds owed to thousands of South Africans remains outstanding despite contributions being deducted from their pay slips.
The Financial Sector Conduct Authority (FSCA) has published the names of thousands of employers with arrears pension contributions, with the number tripling over the past three years.
The FSCA’s latest list of shame flagged over 16,000 employers that have contravened section 13A of the Pension Funds Act, which requires the payment of contributions to pension funds.
The FSCA noted that the number of reported employers has more than tripled over the past three years, rising from 5,430 identified in April 2023 to 75 funds and 16,556 employers as at 28 February 2026.
The latest update specifically names 6,064 employers reported to the authority, based on the severity and duration of the reported arrears.
Total arrears are estimated to be R8.33 billion, affecting approximately 590,000 retirement fund members, it said.
This represents an increase of R1.04 billion (14.2%) from the R7.29 billion reported as at 31 March 2025. Notably, late payment interest now accounts for 43.5% of total arrears.
Speaking in an interview with The Money Show, FSCA Divisional Executive for Retirement Funds Supervision, Zareena Camroodien, said the problem of unpaid retirement fund contributions has been building for years.
She said the regulator’s experience shows that employers under financial pressure frequently divert these contributions to cover operating costs.
“When employers fall on hard times, or at least that’s the feedback that we’ve received, oftentimes, instead of paying over the contributions which they’ve deducted, they use it to finance operational expenses, which is unacceptable,” Camroodien said.
Camroodien added that the FSCA has been publicly naming non-compliant employers and retirement funds since 2023, and the latest publication is the fifth such communication.
She said this strategy has already delivered results, with approximately R1 billion in overdue contributions and late payment interest recovered, although the outstanding amount remains far too high.
Crackdown coming
She added that the FSCA intends to enforce Conduct Standard 1 of 2022 more aggressively, and argued that retirement fund boards often fail to act quickly enough when employers stop paying contributions.
Camroodien also said the regulator is working closely with the National Prosecuting Authority, the South African Police Service’s Directorate for Priority Crime Investigation (the Hawks), SARS and other authorities to improve enforcement.
Looking ahead, she said the Conduct of Financial Institutions (COFI) Bill will be a major turning point because employers will become entities directly supervised by the FSCA.
“When COFI is enacted, that will make employers a supervised entity because, at the moment, employers aren’t a supervised entity by the FSCA. I think that will be a game changer,” she said.
Camroodien stressed that employers who deduct pension contributions but fail to pay them over are committing a criminal offence.
“It is theft. It’s also a statutory crime in terms of Section 37 of the Pension Funds Act, so this is completely unacceptable,” she said.
She encouraged retirement funds and members to make use of the Office of the Pension Funds Adjudicator, where complaints can be lodged free of charge and rulings carry the force of court orders.
She also said retirement funds should be reporting offending employers to the police more consistently.
Camroodien noted that the problem is heavily concentrated in bargaining council funds and municipalities.
“Approximately 77% of non-compliance sits in the bargaining council fund space, and just over 20% sits with the municipalities,” she said.
The FSCA has also engaged employer organisations, labour unions, the National Treasury and the Auditor-General to improve compliance.
She pointed to the National Treasury’s decision to withhold equitable share allocations from some municipalities as one measure that helped encourage payments.
Camroodien said the regulator is optimistic that upcoming legislative changes, stronger enforcement powers under the amended Basic Conditions of Employment Act, and tougher action against retirement fund boards and company directors will help reduce the problem.
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