Section 13A of the Pension Funds Act No. 24 of 1956 (“PFA”) requires an employer of any member of a fund to make payment to the fund in full of any contribution, which in terms of the rules of the fund, is to be deducted from the member’s remuneration, and contribution for which the employer is liable in terms of the fund rules. Such contributions must be transmitted into the fund’s account not later than seven days after the end of the month for which such contribution is payable or be forwarded directly to the fund in such manner as to have the fund receive the contribution not later than seven days after the end of that month.

A similar provision (with slightly different timelines) is contained in the Basic Conditions of Employment Act No. 75 of 1997 (“BCEA”) wherein Section 34A provides that an employer that deducts from an employee’s remuneration any amount for payment to a benefit fund (pension, provident, retirement, medical aid or similar fund) must pay the amount to the fund within seven days of the deduction being made. Any contribution that an employer is required to make to a benefit fund on behalf of an employee that is not deducted from the employee’s remuneration must be paid to the fund within seven days of the end of the period in respect of which payment is made. Notably, the difference between this provision and the PFA provision is that the BCEA imposes a shorter period for compliance in respect of the contributions deducted from the employee’s remuneration.

For the longest time, the application of Section 34A of the BCEA was excluded in respect of retirement funds in terms of Government Gazette No. 25846 of 24 December 2003.  In essence, employers were only obliged to comply with the provisions of the PFA. This exemption was withdrawn by the Minister of Employment of Labour on 13 January 2026, and this withdrawal enables Labour Inspectors to enforce compliance with Section 34A of the BCEA. This means that employers are now required to comply with Section 34A of the BCEA, in addition to compliance with Section 13A of the PFA. Compliance with Section 34A of the BCEA will also be compliance with Section 13A of the PFA, but not visa versa because the time period for payment of contributions deducted from an employee’s remuneration is shorter under the BCEA.

The consequences of late payment or non-payment under the BCEA are that labour inspectors can issue compliance orders against employers. In addition, administrative penalties such as fines of R300.00 to R1500.00 may be imposed against employers. If employers also fail to comply with Section 13A of the PFA, additional penalties may be imposed by the Authority. The penalties in the PFA include imprisonment of the person responsible for the late or non-payment for up to ten years, a fine of up to R10m, or both. Interest will also be payable from the first day of the month following the expiration of the period in respect of which such amounts were payable. Key officials dealing with the financial affairs of the defaulting employer may be held personally liable to pay the outstanding contributions to the fund.

Therefore, employers are obliged to comply with both the provisions of the PFA and BCEA. Employers must review their payroll systems to ensure that they align with the provisions of Section 34A of the BCEA.

Employers should also be the lookout for any amendments to the BCEA that may be made. On 26 February 2026, the Minister of Employment and Labour published proposed amendments to the BCEA, which seek to introduce Section 77B. The proposed addition provides that the Labour Court, CCMA or Bargaining Council to which a dispute concerning any failure by an employer to pay a contribution to a pension or provident fund is referred, in respect of any amount found to be outstanding, may make an order or award directing the payment of the outstanding amount to the fund on behalf of the employee within a specified period and direct the employer to pay interest on the outstanding amount at the interest rate prescribed in terms of Section 13A of the PFA.

The lawmakers seem intent on addressing the late payment and non-payment of contributions by employers.