By Nikki Viljoen – N. Viljoen Consulting (Pty) Ltd – June 2011
Please note that this pertains to South African Tax, Department of Labour and Best Practice requirements.
Times are tough – I get that, but stealing the money that you have deducted from your employees is just not on!
Funds that should be paid across to the Pension Fund or to SARS (South African Revenue Services) or even to the UIF (Unemployment Insurance Fund) and that are then misappropriated by the employer, can and do have serious implications for the employee.
The problem then is that if the company becomes insolvent the funds that should have been paid over cannot (or at best become extremely difficult) be collected or at best become extremely difficult to collect, especially if they were destined for the Pension Fund. This is because retirement type funds are not classified as ‘secured creditors’ but rather as ‘preferred ones’. Payments that were destined to go to SARS are a bit easier to collect, but the bottom line is that if there is no money, then there just is no money and having to wait for years to get that money back in, doesn’t help you one iota, if you are retrenched and unemployed right now without UIF to fall back on.
The bottom line is that the Trustees and Administrators of these funds need to take action the moment payment is not received rather than wait until such time as the company is declared insolvent.
There is also something that you as an employee can do and that is check on a regular basis that your contributions have been paid over to the relevant body and thereby ensure your future.
Be proactive and make sure that everything has been paid over.
Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za or http://www.viljoenconsulting.co.za
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