The Financial Sector Conduct Authority (FSCA) has revealed that 590,000 retirement fund members in South Africa are being negatively impacted by employer non-payment of contributions.Total arrears have surged to R8.33bn, marking a R1.04bn (14.2%) increase from March 2025 figures.Late payment interest now constitutes 43.5% of total arrears, with the severity of arrears escalating as interest costs rise by 21.5% compared to a 9% increase in capital arrears.The FSCA has published a list of 6,064 defaulting employers, highlighting that 21.5% of arrears stem from local government funds and 76.9% from bargaining council funds.Municipalities in the North-West and Free State provinces account for 79.4% of municipal arrears within the local government sector.While total recoveries amount to R1.01bn (12.1% of estimated arrears), the FSCA emphasizes the importance of inter-agency collaboration to address non-compliance.

Recent interventions by the National Treasury to withhold equitable share allocations from non-compliant municipalities have shown some improvement in contribution payments.Employers have made progress, with over 200 records moving to a more compliant status through settlements or voluntary terminations.