Question:
When does an employer start deducting pension fund contributions from an employees' salary? Can a registered company go years without making this deduction? An employee worked for a registered company for ten years, then got retrenched. Hello, this person has no pension fund!!!!!
Answer:
Victor,
The rules are as follows: when a company first introduces a pension fund, existing employees can choose whether they want to join or not. They have one year to make that decision. After that, they can no longer join the company's retirement fund. Once the fund is established, all new employees, who qualify to join the fund MUST join the fund. So if the company has not deducted contributions, it may be because the employee has chosen not to join the fund initially, or is not eligible to join the fund. The obvious thing to do is to ask HR why said employee is not a member of the fund. The other obvious thing is to ask why this query only comes up now, after ten years, now that the employee has been retrenched, after having enjoyed the "benefit" of not saving over the last ten years. In South Africa, the onus to save responsibly ultimately falls on the individual, not on anyone else.
