South Africa: The Rules Around Pensions in a Time of Mass Job Losses
In addition to the stress faced by employees who might lose their jobs during the crisis engendered by Covid-19, there is the added concern of whether their pension contributions will remain safe or fairly managed.
The Financial Services Conduct Authority (FSCA) warned, at the end of March, that many distressed employers might default on their employees’ contributions to retirement funds, as a direct consequence of Covid-19’s impact on businesses and the economy.
While the FSCA reminded the public that most funds have existing rules for distressed employers and members, including relief measures for employees (such as ceasing the payment contributions if they are not being paid), history has taught us that sometimes companies simply don’t play by the rules. And in light of the current crisis, some funds don’t even have relevant rules in place.
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