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Enforcing contribution payments

Learn about enforcing 13A payments, fund responsibilities, personal liability, fund reporting, and more. Understand personal liability issues and obligations for funds. Stay informed on board duties and FSB positions regarding non-payment.

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Enforcing contribution payments

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  1. Enforcing contribution payments Hannine Drake

  2. OVERVIEW • Enforcing 13A payments: • Advising funds • Advising employers • Advising members • Key aspects: fund responsibility to enforce | personal liability |communication to members |

  3. FUND OBLIGATIONS • S 7D(1)(d): “take all reasonable steps to ensure that contributions are paid timeously to fund in accordance with PFA”** • S 13A & Reg 33 fund obligations (Non-payment)

  4. FUND REPORTING • Monitor contributions received (R 33(2)-(4)) • Contributions monitor to PO / Authorised Person • PO / AP to Board • Board to FSB** • Board to member: Reg 33(4)(a)**

  5. PERSONAL LIABILITY • S13A(9): request employer to notify it of personal liability 🤑 🤑 ito s 13A(8) ** • Information Circular 1/2016 (sample letter) • Can be raised as a dilatory plea • MWRF v Renosterberg Municipality (2 Nov 2017) • Unopposed 13A complaint • Meru motufinds that fund has not complied with s 7D(1)(d) (reasonable steps) because had not asked for the 13A(9) 🤑

  6. MWRF v Renosterberg Local Municipality • “It does not appear that the complainant complied with the duty imposed on it by the provisions of section 13A(9) of the Act prior to approaching this Tribunal”

  7. PERSONAL LIABILITY • Responses: • “I was not the Municipal Manager at the time” • “I was the acting MM and had to rely on financial officers” • Options: • In letter of demand or Part A of application • In letter: require employer to inform fund if officials change

  8. 77. Top management of municipalities. • (1)The top management of a municipality's administration consists of • (a) the accounting officer; • (b) the chief financial officer; • (c) all senior managers who are responsible for managing the respective votes of the municipality and to whom powers and duties for this purpose have been delegated in terms of section 79; and (d) any other senior officials designated by the accounting officer. • (2) The top management must assist the accounting officer in managing and coordinating the financial administration of the municipality. MFMA

  9. Mafube Local Municipality v SAMWU NPF (April 2017) ZAFSHC (Unreported) • Employer sought urgent interdict against sale in execution of movable properties to satisfy 13A judgment debt of R16 mil+ • Also sought court sanctioned payment plan over 60 months as a supervisory order • Dismissed on basis that alternative remedy (provincial intervention) exists.

  10. MAFUBE Sheriff ‘snatches’ City Hall More Mafube buildings written up

  11. OTHER OBLIGATIONS • Interest: S 13A(7) & Reg 33 • Report to member** • Report to NDPP** • Litigate? (“All reasonable steps”) • Adjudicator • High Court

  12. FSB POSITION • Serious issue but statutory duty on funds not FSB • FSB receives detailed reporting, monitors what board is doing but not empowered to pursue employer • Funds are not reporting non-payment to members • SMS reporting insufficient; should be formal letter fully informing member of implications and options • Longstanding attempts to bring SAPS on board still ongoing • Possibility that FSB will publish SAPS/criminal reporting guidance for funds

  13. IN SUMMARY • Duty on board to enforce 13A • Ensure: • Members are fully informed of instances of non-payment • Fund asks employer to identify responsible individuals for personal liability

  14. THANK YOU

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