On 13 January 2026, the Minister of Employment and Labour withdrew the 2003 variation notice that had excluded the application of section 34A of the Basic Conditions of Employment Act, 1997 (BCEA) to employers and employees in respect of the payment of contributions to retirement funds regulated under the Pension Funds Act, 1956 (PFA).
During the period of exclusion (which was for approximately 12 years), enforcement of the timeframes for payment of retirement fund contributions took place solely under the PFA.
While the withdrawal may appear innocuous, it has potentially significant implications for employers who fail to pay over retirement fund contributions timeously (or at all), as it reopens an additional statutory avenue for liability and enforcement.
Timeframes for the payment of retirement fund contributions – a discrepancy
Section 34A of the BCEA regulates the timing of payments to a ‘benefit fund’ (which includes a retirement fund) in two circumstances: (i) where an amount is deducted from an employee’s remuneration; and (ii) where an employer is required to contribute an amount that is not deducted from an employee’s remuneration.
Under section 34A:
- If an employer deducts an amount from an employee’s remuneration for payment to a retirement fund, then that amount must be paid over to the retirement fund within seven days of the deduction.
- If the contribution is an employer obligation that is not deducted from an employee’s remuneration, then the contribution must be paid to the retirement fund within seven days of the end of the period in respect of which the contribution is made.
By contrast, section 13A of the PFA – which, among other things, regulates the payment of contributions to retirement funds registered under the PFA – requires that all contributions due under a retirement fund’s rules, whether employee or employer contribution, must be paid into the retirement fund’s bank account or received by the retirement fund not later than seven days after the end of the month for which the contribution is payable.
A timing discrepancy arises when comparing the two statutes. When employee contributions are deducted on or before payday within the contribution month, section 34A requires payment within seven days after the actual deduction.
However, section 13A of the PFA fixes a deadline of seven days after month-end for the combined contribution, effectively allowing a longer period before payment is due.
This means that the BCEA imposes a shorter and earlier payment deadline than the PFA for the same employee contribution. For employer contributions not deducted from remuneration, there is no material discrepancy between the two statutes.
Both provisions, in substance, require payment within seven days after the end of the period for which the contribution is due.
Nhlanhla Notha 10 Nov 2025 As a matter of statutory interpretation, when our courts interpret statutes that overlap, they try to read them in a way that allows both to work together, if reasonably possible. In this case, it is possible for employers to follow both statutes at the same time.
Practically speaking, employers can remit employee contributions within seven days of deduction where that is earlier than seven days after month-end, and by ensuring that the total contributions for the month are received no later than seven days after month-end. Because both timelines can be met, there is no true conflict requiring one statute to be preferred over the other.
Liability under the PFA
Section 13A(8) of the PFA places a statutory duty on the persons who control or are responsible for paying retirement fund contributions (and for submitting the corresponding schedules) to ensure that these are paid and submitted within the statutory timeline.
Where the participating employer is a company, every director regularly involved in the management of the company’s overall financial affairs, will be held personally liable for ensuring compliance with section 13A of the PFA.
Section 13A(9)(a) of the PFA requires a retirement fund to request the participating employer to identify the person for ensuring compliance with section 13A, in writing. If the employer does not provide the requested information, section 13A(9)(b) makes all company directors personally liable for complying with section 13A.
Personal liability under section the PFA includes paying arrear contributions and prescribed late-payment interest.
In addition, a failure to comply with section 13A can amount to a criminal offence. Under section 37 of the PFA, anyone who breaches section 13A may face a fine of up to R10m, imprisonment of up to 10 years, or both.
Despite this potential criminal liability, non-compliance by employers has been rife.
In September last year, the Financial Sector Conduct Authority revealed that, as of 31 March 2025, it had received reports of over 15,000 employers being in contravention of section 13A of the PFA and published the names of over 5,000 employers due to the severity and duration of their arrears.
The Office of the Pension Funds Adjudicator similarly recorded in its annual report that most of the complaints it received related to section 13A non-compliance.
Mzwakhe Poswa 24 Nov 2025 Enforcement mechanisms under the BCEA
The withdrawal of the 2003 variation notice appears to be an effort on the part of the Department of Employment and Labour (DoEL) to clamp down on non-compliant employers. The notice specifically indicates that ‘this withdrawal enables labour inspectors to enforce compliance with section 34A’.
In terms of the enforcement mechanisms under the BCEA, labour inspectors can seek written undertakings from employers to comply with section 34A, or issue compliance orders directing compliance and imposing administrative fines, as prescribed.
The fines currently range from R300 up to R1,500 per employee, depending on the number of previous contraventions. Although the fines are significantly less than those that may be imposed under the PFA, it may potentially be more efficient to impose.
Where an employer fails to comply with a written undertaking or a compliance order, the DoEL may apply to have the undertaking or order made an arbitration award, which can then be judicially enforced.
Going forward, employers who fail to pay over retirement fund contributions, either within the prescribed time frames, or at all, may accordingly face liability under both the BCEA and the PFA.
Practical steps for employers
As the new year kicks into gear, and with the DoEL reportedly ramping up its inspection capacity and keeping a closer eye on ‘serial offenders’, employers should look at taking practical steps to ensure compliance. Some of the steps employers should consider include:
- avoiding deducting contributions materially in advance of month-end if cash-flow constraints or payroll processes make two distinct payment cycles difficult to manage;
- designing payroll and finance processes to meet the earlier of the two triggers;
- where feasible, aligning the deduction event as close as practicable to month-end to reduce the window in which two different clocks run (however, this does not change the employer’s obligation to pay within seven days of the actual deduction);
- tightening payroll processes to ensure that employee deductions and employer contributions are remitted to funds within the statutory window periods;
- maintaining accurate records demonstrating the timing and quantum of each deduction and contribution, together with supporting documentation, that is readily accessible upon inspection; and
- preparing for inspections, including establishing protocols/ response plans and training font-line managers to deal with labour inspectors.
