FSCA Communication 6 of 2025: The calculation of late payment interest by pension funds
Up to now, there have been differing opinions on the date from which late payment interest (LPI) is to be calculated on late contributions receipted into a retirement fund. The FSCA, in Communication 15 of 2023, indicated that LPI was to be calculated from the 8th of the month, while the Pension Funds Adjudicator believed it should be calculated from the 1st.
Legal opinions were obtained by both the FSCA and the Pension Funds Adjudicator; however, the two opinions furnished conflicting opinions. The FSCA then sought a third opinion with the intention that this opinion would be the “tie breaker”.
After receiving the “tie breaker” opinion, the FSCA has reconsidered their position and in Communication 6 of 2025 confirms that LPI is to be calculated from the 1st day of the month following the end of the month in respect of which contributions were payable.
For the sake of clarity, a contribution for April is payable within the first seven days of May. Should it not be paid by the 7th of May, the defaulting employer is liable to pay interest at the prescribed rate from the 1st of May until the date of payment of the arrear contributions.
Axiomatic is of the opinion that this approach is correct and welcomes the fact that clarity has now been obtained, and further, that the two regulatory bodies are now aligned.
Late Contributions Could Cost You
Make sure you’re aligned with the FSCA’s updated interest rules.
Reach out to Axiomatic for expert support.
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