Pension Funds Adjudicator: Individual Liability for Unpaid Contributions Intensified

• The Pension Funds Adjudicator (PFA), Lebogang Mogashoa, is intensifying efforts to crack down on unpaid pension contributions by targeting both employers and individual "responsible persons."
• The PFA will now proactively issue orders against company directors or owners for non-payment, even if not specifically requested in a complaint, asserting this power under the Pension Funds Act.
• The office plans to maximize its inquisitorial powers, including issuing subpoenas, to compel responses from non-compliant entities and individuals.
• Unpaid employer contributions are estimated at R8.3 billion, with local government owing nearly R2 billion, and 51% of PFA complaints relate to non-payment.
• The PFA received a record number of complaints last year, indicating the widespread nature of pension contribution issues.

The PFA is now committed to proactively issuing orders against individuals, such as company owners, who are found responsible for non-payment, even when a specific request for individual liability has not been included in the initial complaint.

The Pension Funds Adjudicator (PFA), Lebogang Mogashoa, has announced a significant shift in strategy to combat the widespread issue of unpaid pension contributions in South Africa. The office intends to intensify its enforcement efforts, directly targeting not only employers but also the specific individuals deemed “responsible persons” behind the failure to remit these crucial funds. This proactive approach aims to address a persistent problem that impacts countless retirement fund members.

Mogashoa highlighted the severe scale of the challenge, noting that a substantial 51% of all complaints received by the adjudicator’s office are directly related to employers failing to pay over employees’ retirement fund contributions. This pervasive non-compliance is viewed as a detrimental force, undermining efforts to ensure positive outcomes for members. The PFA's renewed focus on individual accountability signals a tougher stance against those who neglect their fiduciary duties regarding pension contributions.

This intensified focus comes amidst alarming statistics regarding outstanding contributions. The Financial Sector Conduct Authority (FSCA) estimates that employers collectively owe R8.3 billion in unpaid pension contributions. A significant portion of this, nearly R2 billion, is attributed to local government entities, leaving ordinary civil servants financially vulnerable. The PFA views this as a parasitic drain on the retirement savings system, necessitating more aggressive intervention.

While the PFA has historically possessed the authority to issue legally binding orders against employers under the Pension Funds Act, compelling payment or facilitating asset attachment through court processes, Mogashoa emphasized the office's capacity to pursue “responsible persons” directly. These individuals typically include company directors or owners. Despite a prevailing perception, even among some Members of Parliament, that the PFA lacks the power to hold directors accountable for outstanding contributions, Mogashoa firmly stated that the adjudicator has, in fact, been holding both employers and responsible persons liable.

Addressing this misconception, Mogashoa revealed that the PFA previously encouraged industry stakeholders and funds to specifically request orders against responsible persons when lodging complaints. However, a noticeable reluctance to make such requests persisted. In response, the PFA is now committed to proactively issuing orders against individuals, such as company owners, who are found responsible for non-payment, even when a specific request for individual liability has not been included in the initial complaint. This strategic shift is underpinned by the PFA’s conviction that the Pension Funds Act fully supports such actions, thereby strengthening the Pension Funds Adjudicator individual liability unpaid contributions framework.

This move significantly elevates the personal risk for those in leadership positions within companies that fail to meet their pension contribution obligations. The PFA enforcement under Lebogang Mogashoa is clearly signaling that the era of hiding behind corporate veils for unpaid pension funds is drawing to a close, making director liability unpaid pension funds a central concern for company leadership.

Beyond targeting individual liability, the PFA is also bolstering its investigative capabilities. Mogashoa outlined plans to maximize the use of the office’s inquisitorial powers, which are explicitly granted by the Pension Funds Act. This includes the authority to issue subpoenas to individuals or firms, compelling them to provide information or appear before the adjudicator. This tool is deemed essential, particularly given the frequent non-responsiveness from employers and responsible persons to complaints and official correspondence.

Many cases involve employers or responsible persons simply failing to respond to letters from the PFA, necessitating a more robust intervention. The adjudicator’s office believes that the strategic deployment of PFA inquisitorial powers subpoenas will encourage a fundamental shift in behavior among non-compliant entities. The PFA recently concluded the comment period for draft guidelines detailing how these enhanced powers will be utilized, indicating a clear path toward more aggressive enforcement against employer pension contribution arrears ZA.

This proactive use of subpoenas and inquisitorial powers underscores the PFA’s commitment to ensuring compliance and protecting retirement savings. It signifies a move away from a purely reactive complaint-driven process to a more assertive investigative stance, ensuring that those responsible for unpaid contributions cannot evade accountability.

The PFA's intensified enforcement efforts come against a backdrop of a consistently high volume of complaints. Last year, the office recorded an unprecedented number of complaints, marking a 29% increase over the five-year average. While there has been a slight reduction in the current year, the figures remain substantial. As of August 31, 2025, the PFA had processed 5,059 complaints, following 5,700 complaints in the preceding year.

These statistics underscore the persistent and widespread nature of issues related to pension fund contributions and administration. The high caseload reinforces the necessity for the PFA’s more stringent approach, particularly concerning employer pension contribution arrears ZA. The adjudicator’s office is clearly responding to a significant and ongoing challenge that affects a large segment of the working population, emphasizing the critical importance of robust PFA enforcement.

Lawyers must advise employer clients, particularly directors and owners, of the heightened personal liability risk for unpaid pension contributions, as the PFA will now proactively pursue 'responsible persons' even without specific requests. Compliance officers should prepare for more aggressive PFA investigations and the use of inquisitorial powers, including subpoenas, for non-compliance.

Source: Original reporting via unnamed source