ANC must pay R10m a month to clear provident fund arrears

The FSCA has concluded an enforceable undertaking with the ANC Staff Provident Fund on how it is clear the reported R85 million in arrear contributions.

The fund is a defined contribution fund with about 535 members.

“The African National Congress, which is a participating employer in the fund, has not met its obligations in terms of making regular retirement fund contributions into the fund,” the FSCA said in a statement.

The Authority said the enforceable undertaking requires the fund to:

• Enforce an agreement reached with the ANC to pay R10m to the fund every month from 1 October until the arrear contributions, including the late-payment interest, are extinguished.
• Ensure that the ANC pays the fund the outstanding amounts in respect of insured death benefits, which were not honoured by the insurer because of outstanding premiums, and that the amounts are paid to the beneficiaries.
• Ensure that the risk benefit premiums and members’ pro rata portions of the administration costs are paid during the 12 months during which contributions will be suspended in terms of the fund’s rules.
• Provide the FSCA with confirmation that the ANC has stopped making deductions from members’/employees’ remuneration for contributions to the fund from the effective date of the amendment to the fund’s rules to suspend member and employer contributions.
• Report monthly to the FSCA on the status of the arrear contributions and the employer’s adherence to its obligations in terms of the agreement with the fund.
• Communicate monthly with the affected members on the status of the arrear contributions and provide members with a monthly benefit statement until the arrears are paid in full.

FSCA Commissioner Unathi Kamlana said: “The onus of 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.”

An enforceable undertaking is an agreement that provides the FSCA with broad remedial powers aimed at rectifying any breach in the conduct of a regulated entity.

The provident fund notified the FSCA in January 2020 that the ANC was in contravention of the fund’s rules and section 13A of the Pension Funds Act because contributions for November 2018 to November 2019 had not been paid. In May 2021, the fund informed the FSCA that the ANC was again in arrears because contributions for November 2019 to May 2021 also had not been paid.

The FSCA issued a letter of non-compliance to the ANC on 3 June 2021.

ANC battling to pay salaries

According to a report by Independent Online earlier this month, ANC employees’ provident fund contributions have not paid despite being deducted from their salaries for the past three years.

The report claimed that 12 ANC employees have died over the past three years, and their families were battling to access their provident fund benefits.

The ANC has been struggling to pay salaries on time for about four years.

Fin24 quoted Mvusi Mdala, a representative of ANC employees, as saying that the party failed to pay employees their salaries for July, despite promising to pay all outstanding salaries.

Mdala said if the ANC did pay the R10m a month as outlined in the agreement, he hoped it would not come “at the further expense” of employees.

In March this year, the ANC admitted it was behind with its tax payments but denied that it owed more than R100m to the South African Revenue Service, as claimed by the Daily Maverick.