Posted with compliments from SEIFSA
4 August 2016
The Chief Executive Officer / Managing Director
Member companies affiliated to the associations federated to the
Steel and Engineering Industries Federation of Southern Africa
AMENDMENT TO S13A OF THE PENSION FUNDS ACT
At its meeting on 1 August 2016, the SEIFSA Board directed that I make member companies aware of recent amendments to the Pension Fund Act that became effective from 28 February 2014. It is vitally important that you company takes note of and/or implements the points noted below:
- Non-compliance with Section 13A of the Pension fund Act 24 of 1956 (the “Act”) which deals with payment of contributions to the Fund is now a criminal offence in terms of the new sections 13(8) and (9) that have been added to the Pension Funds Act with effect from 28 February 2014. If convicted, a fine of up to R10 million and/or imprisonment of up to 10 years may be imposed on the responsible party.
- In addition to criminalising the non-payment of contributions, the new amendments also hold personally liable for non-compliance the person at the employer responsible for not paying the contributions over to the Fund.
- Every Director of a Company or every Member of a Close Corporation who is regularly involved in the management of the Company’s or Close Corporation’s overall financial affairs, or all the persons comprising the governing body of the employer, as the case may be, are personally liable for compliance with his Section of the Act.
- In terms of Section 13A (9) (a) of the Act, the Fund is compelled to request all participating employers to identify a “Responsible Person” that will be personally liable in the event of non-compliance with Section 13A.
- Failure to comply with the nomination of a Responsible Person will lead to all Directors of the Company or all the Members of a Close Corporation regularly involved in the management of the Company or Close Corporation, or all the persons comprising the governing body of the employer, as the case may be, being held personally liable for non-compliance.
- If contributions remain outstanding for 90 days, the Fund’s trustees are required to advise the Financial Services Board and report the matter to the National Director of Public Prosecutions so that criminal action can be taken against the employer. The Financial Services Board may also inform SARS of any failure to comply with Section 13A.
- The Financial Intelligence Centre Act No.38 of 2001 (FICA) also requires the Fund to establish and verify the identity of clients in order to combat or eliminate money laundering activities. Therefore, the Fund will also request documentation for the purpose of updating the records in this regard, whilst obtaining information on the Responsible Person.
Should you have any questions on this important piece of legislation, please do not hesitate to contact our Chief Financial officer, Mr Rajendra Rajcoomar, on (011) 298-9400 or by e-mail to the address firstname.lastname@example.org
Kaizer M. Nvatsumba
Chief Executive Officer
cc: Mr Rajendra Rajcoomar, Chief Financial Officer