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Workplace & Labour Rights

Boss deducting pension money but not paying it over

An employee discovers that pension contributions have been deducted from their salary for months but never paid into the pension fund — leaving them unprotected and their employer in criminal territory.

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The Situation

What They Said

“My payslip shows you are deducting my pension contribution, but the fund says you haven't paid it over — that is a criminal offence under Section 13A of the Pension Funds Act.”
You notice your payslip shows pension deductions every month, but after calling the pension fund directly you discover your employer hasn't paid over any contributions for the past six months. Thousands of rands of your money are sitting in the company's bank account instead of in your fund, meaning you have also lost death and disability cover during this period.
The Fallacy

Cash Flow Crisis Justifies Holding Employee Funds

The employer is treating your deducted pension contributions as a temporary business loan during a difficult period. But pension deductions are not the employer's money — they are held in trust for you from the moment they are deducted from your salary. No financial difficulty, however genuine, gives an employer the legal right to withhold them. Section 13A of the Pension Funds Act makes non-payment a criminal offence regardless of the reason.

What the Law Says

Your Legal Foundation

Ley de Contrato de Trabajo 20.744
art. 132 de la Ley de Contrato de Trabajo — Employer withholding contributions
“If the employer has withheld worker contributions destined for social security agencies, or dues, periodic contributions or contributions to which workers are obliged by legal norms or collective labor agreements, or resulting from their membership in professional associations with union status, or as members of mutual societies or cooperatives, or for services and other benefits provided by such entities, and at the time of termination of the employment contract for any reason has not paid in full or in part these amounts to the agencies, entities or institutions for which they were intended, from that moment it must pay the affected worker a monthly comminatory sanction equivalent to the remuneration that was earned monthly by the worker at the time of termination, which amount will accrue with the same periodicity as the salary until the employer reliably proves that it has made effective payment of the withheld funds.”
Although the law applies upon termination of the employment contract, the employer's failure to remit pension contributions that were deducted from your salary is a violation. If the contract ends, you would be entitled to a monthly penalty equal to your salary until the employer pays the withheld amounts.
What Scripture Says

God's Word on This

James 5:4 ()
“Look! The wages you failed to pay the workers who mowed your fields are crying out against you. The cries of the harvesters have reached the ears of the Lord Almighty.”
God hears the cries of workers whose earnings are withheld. Pension contributions withheld after deduction is wage theft by another name — deducted from your pay but never reaching your fund.
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What They'll Say Next

Common Counter-Arguments

After you respond, they may push back with these arguments. Members get the full rebuttal for each.

They might say: “The law only applies after the employment contract ends, so you have no claim now.”
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They might say: “We didn't withhold anything; we just didn't pay our own employer contributions.”
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