The African National Congress (ANC) has failed to meet its obligations in terms of making regular retirement fund contributions to the Provident Fund, racking up arrears of R86 million, the Financial Sector Conduct Authority (FSCA) revealed Wednesday.
Responding to queries on the matter, the FSCA said it was prudent and in the public interest to provide an update to the public.
The FSCA said it was also acting in accordance with the Financial Sector Regulation Act, 2017, which requires it to inform the public of regulatory action or intervention it has taken in relation to regulated entities.
“The ANC, which is a participating employer in the Fund, has not met its obligations in terms of making regular retirement fund contributions into the Fund,” said the FSCA.
“‘This has resulted in an accumulation of arrear contributions in the Fund of approximately R86 million.”
The FSCA said it has engaged regularly with the Provident Fund, as it does with any fund, on its obligations to members.
“These engagements have culminated in a published Enforceable Undertaking (EU) being concluded with the Fund,” said the FSCA.
The EU requires the Fund to, inter alia;
1. Enforce an agreement reached with the employer to pay a sum of R10 million every month into the Fund until the arrear contributions are extinguished;
2. Provide monthly confirmation to the FSCA that the employer is not making further deductions from employees’ salaries, if paid, in line with the amended Fund rules;
3. Report monthly to the FSCA on the status of the arrear contributions and the employer’s adherence to its obligations as per the agreement with the Fund; and
4. Provide monthly updates to members of the Fund on the status of the arrear contributions.
An EU, in certain circumstances, can be an effective regulatory tool of intervention to facilitate remedial action against the regulated entity.
FSCA Commissioner Unathi Kamlana said: “The onus on ensuring that there are no arrear contributions and to consider appropriate action if there are such arrears, remains on the trustees of a fund.
“Both employers and funds are reminded of the importance of treating their workers and members fairly by honouring their obligations as enshrined in various legislation”.
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