Question:
My father in law got retrenched at the end of April 2014 from his operation due to the ongoing strike in the Platinum belt. Only their operation was affected by the strike. The operation was taken over by one of the larger Pt companies in the area a few years ago and the other divisions are largely unaffected by the strike. When enquiring about the witdrawal of his funds in Sanlam retirement fund, he was informed that because the division is liquidating no payouts can be made from the fund as it is an asset of the operation he worked for. Only when the liquidation proceedings has finished they will be paid out if there is any money left. I feel that this is unfair practice and not legal. According to my knowledge 1. the umbrella fund is a separate legal entity and not an employer asset and 2 that during liquidation debts due to employees are top priority. Is my logic correct. In the dire situation in Rustenburg at the moment retrenched employees are worried about there next meal as the chances for finding a new job is very slim. The need the money from the fund to survive and they do not have money for legal advice. What can they do in a situation like this?
Answer:
Braam, If your father-in-law belongs to a defined contribution fund (as we would expect) then you are absolutely correct. On retrenchment, he is entitled to withdraw from the fund. The fund is ring-fenced and creditors (including the employer) have no claim on this money. It is not an asset of the operation. It sounds more as though the company has not paid over contributions to the fund. It is then a creditor of the fund, and the fund's claims will rank very highly. If this is the case you need to alert the FSB's Enforcement Department (that contributions have not been paid). However, even if the employer did not pay over all contributions, you should still be entitled to claim your accumulated benefit; with a subsequent claim for any outstanding contributions.
