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ANC forced to pay outstanding provident fund contributions owed to its workers

ANC forced to pay outstanding provident fund contributions owed to its workers
Ray Mahlaka
By Ray Mahlaka
17 Aug 2022
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The Financial Sector Conduct Authority, a regulator of financial markets, has compelled ANC bosses to settle outstanding and accumulated debt it owes its workers through a provident fund scheme. The total outstanding debt is estimated to be R85m.

A year ago, aggrieved ANC workers accused the governing party of a “widespread” practice of docking their pay for income tax, medical aid benefits, and retirement savings, but failing to hand over the workers’ contributions to relevant institutions.

Essentially, the head honchos at the ANC’s Luthuli House headquarters in Johannesburg were deducting money for benefits from the pay of its workers, but kept the funds for the governing party, which is illegal.

This is because ANC workers, in the eyes of the SA Revenue Service (Sars), would be in arrears for pay-as-you-earn tax contributions, the medical aid benefits of workers would be inactive because of outstanding payments, workers would not be able to claim for Unemployment Insurance Fund (UIF) benefits, and they would not have access to savings if they were to retire.

ANC workers argued that the pernicious behaviour of docking their pay without handing over the funds to various benefit schemes and institutions has been happening since January 2018. This has resulted in the governing party owing “hundreds of millions of rands” in outstanding benefits contributions for its workers.

Read more in Daily Maverick: “The ANC, a tax evader? Massive debt, unpaid salaries, dry donation taps”

But law enforcement agencies are catching up to the ANC’s illegal behaviour. 

‘Pay back the money’


The Financial Sector Conduct Authority (FSCA), which is a regulator of financial markets and the universe of investment products, has entered the fray, compelling ANC bosses to settle outstanding and accumulated debt it owes its workers through a provident fund scheme. 

The total outstanding debt — housed in an ANC staff provident fund that the party’s workers contribute to in theory (but not in practice because funds are deducted and not handed over) — is not known. An FSCA media statement issued on Wednesday, 17 August, but later withdrawn, put the total debt at R85-million. Whatever the outstanding debt, the FSCA has ordered the ANC staff provident fund to compel the governing party to begin settling the debt.

The FSCA signed an enforceable undertaking with the ANC staff provident fund in August, requiring the governing party to pay R10-million into the fund each month until its accumulated contribution arrears have been paid in full.



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“The onus on ensuring that there are no arrear contributions, and to consider appropriate action if there are such arrears, remains on the trustees of a fund,” FSCA Commissioner Unathi Kamlana said in a corrected and reissued statement on Wednesday.

“Both employers and funds are reminded of the importance of treating their workers and members fairly by honouring their obligations as enshrined in various legislation.”

The ANC staff provident fund has 535 members (the party’s workers) and is considered to be a defined contribution fund, meaning that workers contribute to it and the governing party makes a matching contribution. However, the ANC has been making deductions from worker salaries, but not handing the money to the fund or matching the workers’ contributions.

Cash crunch, nervous donors


The ANC has also faced problems with paying salaries to its workers, who have staged several protests against the party at its Luthuli House headquarters. The workers say the ANC is facing serious financial issues, with its debt standing at more than R200-million by September 2021, which has now probably accumulated. 

For its cash crunch, the ANC has blamed several factors: the Covid pandemic and an economy in the doldrums, and donors who fear exposure owing to the Political Party Funding Act, which requires every donation above R100,000 to be disclosed and caps the annual contribution of donors at R15-million. The ANC’s reputation has also taken a further knock after being implicated in high-level corruption during the State Capture years, making donors nervous about being associated with the party.

Contribution arrears


Back to the ANC provident fund. 

The non-payments to the ANC staff provident fund pushed the political party’s workers to inform the FSCA in January 2020 that the party was in contravention of the fund’s rules as well as the Pension Fund Act. At the time, the ANC was in arrears in terms of contributions from November 2018 to November 2019.

The fund followed up with the FSCA informing it that the ANC was again in arrears as worker contributions from November 2019 to June 2020 had also not been paid. 

The FSCA’s intervention now requires the ANC provident fund and the party’s officials to provide monthly updates to fund members (workers) on the status of the party’s contribution arrears. The fund must also report monthly to the FSCA on the status of the ANC’s contributions arrears and whether it is adhering to its obligations in line with its agreement with the fund.

No consequences


At last count, the ANC owed more than R100-million to the South African Revenue Service for outstanding pay-as-you-earn (PAYE) tax dating back three years. It also owed money to the UIF for benefits that are due to its workers.

In the private sector, business owners have been prosecuted for not paying over PAYE, UIF, and provident fund deductions. But the party doesn’t seem to be facing any consequences. BM/DM

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