COSATU says employers default on pension contributions have more than doubled, putting nearly 600,000 workers at risk. The FSCA reports 15,521 defaulting employers in March 2025, up from 7,700 in 2024 and 4,000 in 2023. The worst-hit sectors include automotive, private security and municipalities.
Billions in Arrears and Lost Cover
Arrears exceed R7.2bn: IOL cites R7.29bn in unpaid contributions. SowetanLIVE quotes an FSCA estimate of R7.23bn, including R2.98bn in late-payment interest. COSATU warns that when employers fall into arrears, workers can lose death and disability benefits. This is devastating for families, especially in high-risk jobs like private security.
‘Name and Shame’ List Grows
Of the 15,521 defaulters, 5,821 are publicly listed for severe and prolonged arrears. This is a “naming and shaming” measure. The FSCA adds that 5,671 employers owe more than R50,000 for over five months. Another 79 owe under R50,000 but have late-interest above R50,000. Data clean-ups—especially at the Private Security Sector Provident Fund—have removed deregistered firms from lists. However, they still reveal widespread non-compliance.
Pressure on Auto Sector Adds Risk
COSATU links the strain to a 30% US tariff on South African auto exports. Recent shocks like Goodyear’s shutdown and Ford’s planned retrenchment of more than 470 workers also contribute. This heightens the stakes if employers default on pension contributions and workers try to claim benefits.
Enforcement and Government Tenders
COSATU says employers who withhold contributions breach Section 13A of the Pension Funds Act. The federation wants tighter enforcement and an end to government tenders for defaulters. It also calls for stronger inspections. It says labour inspectors will rise from 2,000 to 22,000 by 2026 to police compliance. Furthermore, it is working with the FSCA and Labour Department on lasting solutions.
What Workers Need Now
COSATU plans campaigns in hard-hit sectors to recover all monies owed—with interest—and to protect retirement savings. Until employers default on pension contributions are reversed, unions and regulators say they will escalate action to secure workers’ rights.
