Lize de la Harpe, Senior Legal Advisor: Regulatory Unit at Sanlam

Sections 13(1) and (2) of the Pension Funds Act 24 of 1956, read together with FSCA Conduct Standard 1 of 2022 (RF), imposes a duty on the participating employer under a retirement fund to calculate and pay over to the fund the contributions, payable in terms of the fund’s rules, on a monthly basis and to furnish to the fund certain prescribed information.

The non-payment or late payment of contributions by an employer could result in personal liability for certain individuals within the employer and constitutes a criminal offence. If the employer fails to notify the fund of the identities of the applicable individuals, all the directors of the employer, will be personally liable for the non-payment or late payment of contributions.

Does this personal liability survive the liquidation of an employer? Yes – as confirmed recently in the Financial Services Tribunal (FST) matter discussed below.

Transport Sector Retirement Fund v PFA & Others Case No.: PFA3/2026

The complaint concerns the alleged failure by the first respondent, Jack Transport (Pty) Ltd (“the employer”), to pay arrear pension fund contributions due to the applicant in terms of section 13A of the Pension Funds Act, as well as the alleged personal liability of the second and third respondents as persons responsible for the financial management of the employer.

At the time of the complaint, the employer was in the process of voluntary liquidation. On this basis, in the Adjudicators view, it was precluded from dealing with the complaint as it related to arrear contributions where the employer was no longer in business and as such (in its view) any order compelling payment would be futile. The complaint was accordingly dismissed due to a lack of jurisdiction.

The central issues before the FST were the following:

1. The scope of the Adjudicator’s jurisdiction under section 30A of the Pension Funds Act;
2. The proper interpretation and effect of section 13A, particularly section 13A(8);
3. Whether the liquidation or operational status of the employer affects jurisdiction; and
4. Whether considerations of alleged futility can constitute a jurisdictional bar.

Jurisdiction is determined by statute. The Adjudicator is required to determine complaints that fall within section 30A of the Pension Funds Act. A “complaint” includes disputes concerning the payment of contributions. Accordingly, a complaint concerning the non-payment of pension fund contributions falls squarely within that jurisdiction. Moreover, jurisdiction is concerned with the power to determine a dispute; not the ease with which a resulting order may be enforced.

With regards to contributions, section 13A imposes obligations on employers to pay contributions timeously and in full. Section 13A(8) provides that persons who are regularly involved in the management of the employer’s overall financial affairs are personally liable for compliance with section 13A and for the payment of contributions. In addition, section 13A(9) supplements this regime by providing mechanisms for identifying such responsible persons.

The Pension Funds Act makes no particular reference to the employer’s business status, nor does it make it a requirement that the employer must have ability to pay. The fact that an employer is in liquidation or no longer trading therefore does not remove the Adjudicator’s jurisdiction.

The interpretation of section 13A(8) was confirmed in Engineering Industries Pension Fund and Another v Installair (Pty) Ltd and Others (Case No. 1633/2023, 16 January 2025). In that matter, the Court held that section 13A(8) creates a direct statutory basis for personal liability, enabling funds to hold directors liable for unpaid contributions without the need to pierce the corporate veil. The Court granted relief against the directors notwithstanding that the employer was in liquidation.

The FST concluded that the Adjudicator erred in dismissing the claim on the basis of jurisdiction and accordingly upheld the application for reconsideration.

This case sums it up clearly – section 13(8) of the Pension Funds Act creates a direct statutory personal liability. This liability is not derivative of the employer’s liability but exists independently and attaches to those persons responsible for the employer’s financial affairs. It is specifically designed to address situations where the employer fails to meet its obligations, thereby preventing the evasion of such obligations through corporate structures or financial distress.

As such, the fact that an employer is in liquidation or no longer trading does not absolve the directors from personal liability for arrear contributions.

ENDS