Bosses who withhold contributions, will pay the price
Employers who fail to transfer the retirement contributions of its employees to the Motor Industry Bargaining Council (MIBCO), will be forced to pay what is due to the employee themselves it something happens to the employee.
That was the warning from Paulos Masemola, General Secretary of MIBCO, on the latest episode of MISA TV, a weekly episode on the YouTube channel of MISA, the Motor Industry Staff Association, aimed at educating members about the retail motor industry and related matters.
A recent Financial Services Tribunal ruling found that employers carry the legal and financial risk when contributions go unpaid. The ruling is especially serious where a worker dies or becomes disabled while contributions are in arrears.
The Motor Industry Retirement Funds include built-in insurance that pays a worker’s family a lump sum worth three times their annual salary if they die or are disabled while employed. But that cover lapses the moment an employer stops paying, just like any insurance policy when the premiums go unpaid. So if a worker dies or is disabled during that gap, the family loses that payout entirely and is left exposed, purely because the employer failed to pay over money the worker had already earned.
"This money belongs to workers. It was earned through their labour and no employer has the right to withhold it. MISA urge members to check their fund credits frequently,” says Martlé Keyter, MISA's Chief Executive Officer: Operations.
The Financial Sector Conduct Authority (FSCA) earlier described the retail motor industry as the “worst offender”, indicating that there has been a 50% increase in non-compliant employers to the Auto Workers Provident Fund and the Motor Industry Provident Fund, affecting the accounts of more than 9 000 employees.
According to the FSCA there is also roughly R88 billion in financial assets sitting unclaimed across South Africa and the motor industry holds a significant share.
Thousands of workers are unaware they are owed money through pension funds, severance packages, arrear wages, death and ill-health benefits, and "hidden" entitlements such as Additional Holiday Pay. These funds are often left untouched because workers change jobs, change phone numbers or were simply never told the money existed. Yet the money remains theirs and can be claimed at any time.
Click on this link to watch the episode: https://youtu.be/JrhsjvTz0uE.
Issued by Sonja Carstens, Manager of MISA's Media and Communication Department, on behalf of the Union.
For media enquiries, contact Phakamile Hlubi-Majola on 083 367 6417 or email [email protected].
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Caption: Paulos Masemola, General Secretary of MIBCO, in conversation with Phakamile Hlubi-Majola, MISA’s Spokeperson.