FSLGAB – changes to Section 13A

Asanda Ntile19 August 2013

Late/Non payment of contributions

Source – Personal Finance

How members are affected

•Unpaid GLA premiums – no death/disability cover

•Non payment may be discovered much later, upon retirement or withdrawal

Original Section 13A

•Payments to be made no later than 7 days after the month which they are due

•Data in respect of reductions to be made by 15th day

•Interest is payable on outstanding contributions

•Monitoring duty placed on PO or any party appointed by Fund

•Should non payment continue for 90 consecutive days, monitoring person must report to NPA within 14 days

Original Section 13A

Consequences of non payment:•Late payment interest

•Registrar may report to Enforcement Committee

•Employer may be liable for investment loss to members

The reality

Source – Personal Finance

•3 800 complaints to the PFA in 2012

Amendments to Section 13A

The objective•Extend liability for non payment of retirement fund contributions by an employer to certain individuals within that employer

Additions to Section 13A

The following persons are liable:•Company - controlling shareholders involved in financial affairs

•Close Corporation – controlling members involved in financial affairs

•Any other employer – board members involved in management of financial affairs

Additions to Section 13A

Employer obligations:•Notify the Fund of relevant persons

•Failing which, personal liability for •All directors •All members•All persons comprising governing body