Pension Fund Complaints Hit Record High as Unpaid Contributions Spark Alarm

Retirement fund disputes surge to the highest level in 28 years, with unpaid employer contributions emerging as the biggest concern for South African workers.

The Office of the Pension Funds Adjudicator (OPFA) has recorded a historic increase in complaints, receiving 13,041 disputes during the latest financial year, the highest number since the office was established in 1998.

The figure represents a 26% increase compared to the previous year’s 10,331 complaints and is 39% above the 10-year average of 9,411 complaints.

Presenting his first annual report since taking office, Pension Funds Adjudicator Lebogang Mogashoa said the increase reflects both growing public awareness of the OPFA and persistent challenges within South Africa’s retirement fund industry.

Unpaid Contributions Drive Most Complaints

The largest source of complaints remains the non-payment of retirement fund contributions by employers.

According to the report, contribution-related complaints accounted for 61.48% of all matters closed during the reporting period.

Withdrawal benefit disputes made up a further 22.93%.

Together, these two categories represented approximately 84% of all completed cases.

The trend highlights ongoing concerns about employers deducting retirement contributions from employees’ salaries but failing to pay those funds into retirement schemes.

Many workers only discover the problem when they attempt to withdraw benefits or claim retirement funds.

Two-Pot System Creates New Challenges

The introduction of South Africa’s two-pot retirement system in September 2024 has also contributed to rising complaint volumes.

The system allows qualifying members to access a portion of their retirement savings before retirement while preserving the remainder for their retirement years.

While the reform was introduced to provide financial flexibility, it has also created new administrative and operational pressures for retirement funds.

The OPFA noted that the implementation process exposed governance weaknesses and service delivery shortcomings across parts of the industry.

Officials warned that additional disputes may arise as members continue seeking access to retirement benefits that remain legally inaccessible before retirement age.

Major Funds Under Pressure

Several retirement funds accounted for a significant proportion of complaints lodged during the year.

The Private Security Sector Provident Fund was linked to 75.60% of complaints received.

Other funds frequently appearing in complaints included:

• Contract Cleaning National Provident Fund (3.78%)
• Transport Sector Retirement Fund (3.23%)
• Alexander Forbes Retirement Fund (2.66%)
• Sanlam Umbrella Provident Fund (1.94%)

The figures underline the concentration of disputes within certain sectors and retirement fund structures.

Record Number of Cases Resolved

Despite the surge in complaints, the OPFA reported a record performance in resolving disputes.

The office finalized 11,047 cases during the reporting period, the highest annual total in its history.

Approximately 91% of matters were resolved within six months, demonstrating the office’s ability to handle a growing workload.

However, Mogashoa cautioned that increasing demand continues to place pressure on resources, making improvements to case management systems and digital services increasingly important.

Ongoing Concerns About Retirement Security

The OPFA identified non-compliance with Section 13A of the Pension Funds Act as one of the most serious risks facing the industry.

The legislation requires employers to pay over retirement contributions deducted from employees’ salaries.

Failure to do so can significantly reduce workers’ retirement savings and undermine confidence in South Africa’s retirement system.

Officials warned that retirement savings play a critical role in reducing future dependence on family members and state support, making compliance essential for long-term financial security.

Digital Services Continue to Grow

Most complaints are now being submitted through digital platforms.

Approximately 70% of complaints were received via email or the OPFA website, while 27% still came through walk-in services.

Gauteng generated the largest share of complaints at 45.6%, while the Northern Cape recorded the lowest proportion at 2.5%.

The OPFA says it will continue strengthening its adjudication processes, expanding digital accessibility and using complaint data to identify recurring problems across the retirement fund industry.

With unpaid contributions remaining the dominant issue, the latest figures raise fresh concerns about employer compliance and the protection of South Africans’ retirement savings.