Is it legal for my employer to withhold payout of my fund?


Due to family responsibilities abroad, I resigned from my previous employer and emigrated. The resignation was in breach of contract. Due to the breach the company is demanding repayment of cost of training incurred and thus will not pay out my pension fund. Is this legal and is there anything I can do?


In terms of section 37D(b)(ii) of the Pension Funds Act, a fund may deduct from a member’s benefit payable in terms of the rules of the fund, any amount in respect of damages caused to the employer by the member as a result of theft, fraud, dishonesty or misconduct, provided: • the member has admitted liability in writing, or • judgement by a court of law has been obtained against the member.   The theft, fraud, dishonesty or misconduct must have been committed while the employee was still a member of the fund.   The member’s written admission of liability must be clear and unambiguous and should specifically allow for deductions to be made in respect of wrongdoing or delict committed by the member against the employer.

The judgement by a court of law must relate to either of the following:

A civil judgment sounding in money, i.e. a judgment made consequent to a civil action and specifically awarding damages to the employer as compensation for the financial loss suffered; or a compensatory order made by a criminal court in terms of section 300 of the Criminal Procedure Act, specifically allowing compensation to the employer for the financial loss suffered. Presumably in his application for such an order the employer has to claim that some wrongdoing or delict has been committed by the employee which amounts to theft, fraud, dishonesty or misconduct in terms of section 37D(b)(ii).

If you have not signed a written acknowledgement of debt, and there is no legal case number dealing with your case, then the employer cannot 'hold' your fund. If they will not assist you, you need to contact the fund administrator directly, and request the withdrawal notification form from them. Without the aforementioned document (acknowledgement of debt or case number) they cannot withhold payment. If they do, you need to lodge a formal complaint with them, which you can escalate to the Pension Funds Adjudicator if necessary.

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