The Financial Sector Conduct Authority (FSCA) has ordered the ANC staff provident fund to compel SA’s ruling party to settle about R86m in accumulated contribution arrears that it owes members of the fund.
The authority signed an enforceable undertaking with the ANC staff provident fund this month, requiring it to ensure that the ruling party pays R10m into the fund each month until its accumulated contribution arrears have been paid in full. The ANC staff provident fund, is a defined contribution fund with about 535 members.
“The onus on ensuring that there are no arrear contributions, and to consider appropriate action if there are such arrears, remains on the trustees of a fund,” FSCA Commissioner Unathi Kamlana said in a statement on Wednesday. “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.”
The ANC has been struggling to pay salaries on time to workers employed at its head office Luthuli House as well as certain branch offices, for more than four years. In July, workers called for the party’s national policy conference to be postponed because salaries hadn’t been paid. Worker representatives have also questioned why the party had money for a conference but not for salaries.
The late payments prompted the ANC staff provident fund to notify the FSCA in January 2020 that the party was in contravention of fund rules as well as the Pension Fund Act since contributions on behalf of staff for November 2018 to November 2019 hadn’t been paid. In May 2021 the fund informed the FSCA that the ANC was again in arrears as contributions for November 2019 to May 2021 also hadn’t been paid.
The FSCA then issued a letter of non-compliance to the ANC on June 3, 2021 and also notified the staff provident fund. The authority has communicated its concern about the ANC’s continued non-compliance with its regulatory obligations and instructed its staff provident fund to exercise its fiduciary duty by compelling the ruling party to make good on its unpaid contributions.
Apart from the monthly R10m payment that the ANC is required to make into its staff provident fund starting on October 1, 2022 until the full R86m in contribution arrears have been extinguished, the enforceable undertaking signed with the staff provident fund also requires additional remedial action.
The ANC staff provident fund must also ensure that the ANC pays outstanding insured death benefits that weren’t honoured by an unidentified insurer due to outstanding premium payments that weren’t made by the party. The fund is also required to provide monthly confirmation to the FSCA that the ANC is not making further deductions from employees’ salaries, if paid, as per amended fund rules.
The enforceable undertaking further requires the staff provident fund to provide monthly updates to fund members on the status of the party’s contribution arrears. The fund must also report monthly to the FSCA on the status of the ANC’s contributions arrears and whether it is adhering to its obligations in line with its agreement with the fund.
The Financial Sector Regulation Act allows the FSCA to disclose details of any regulatory intervention it takes against regulated entities if it is in the public interest.
“We are aware of the FSCA’s action and the matter is being handled by the treasurer general [Paul Mashatile],” ANC spokesperson Pule Mabe said.
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