Accurate employer‑submitted member data is essential for smooth, compliant and delay‑free claim processing. Recent cases show growing issues with outdated member information — especially for foreign nationals — and confusion around the circumstances which may justify payment to a third‑party received on behalf of the member.
Employer Responsibilities
Employers have a Financial Sector Conduct Authority imposed responsibility to provide certain information in relation to their members as contained in Conduct Standard 1 of 2022 and must ensure all member details are correct and updated, including but not limited to:
- Full legal names and correct ID/passport numbers
- Citizenship status and SARS tax numbers
- Accurate employment dates, salary information, contribution data and member status (resignation, retirement, death)
Any changes — such as lapsing of passports/ work permits/ citizen status changes, banking details, contact information — must be submitted to the Administrator immediately. Inaccurate data causes mismatches with SARS held information and delays the processing of tax directives which are required for benefit transactions.
Why Accurate Data Matters for SARS
Before a benefit transaction can be processed, in terms of the law, SARS must be notified and a tax directive must be obtained so that any amounts due or owed to SARS are deducted from the benefit in accordance with tax laws.
SARS validates every detail on a claim. If anything differs from what they have on record, the application for a tax directive is rejected. Common issues include:
- Expired passports
- Mismatching personal information
- Incorrect employment dates or salary data
- Invalid, Inactive or missing tax numbers
Accurate data received from the employer is the only way to avoid repeat rejections and long delays suffered by members.
Passport & Work‑Permit Validity
Many delays occur when foreign nationals’ passports or permits expire before exit. Without valid documents, they cannot open a South African bank account — and SARS cannot issue a directive.
Third‑Party Payments
Third‑party payments are exceptional, not standard. Under section 37A(4) of the Pension Funds Act, they are only allowed when a member cannot open an account for lawful reasons, and sufficient proof is provided. Expired documents are not a valid reason.
These requests undergo strict governance and often occur due to outdated passport information.
Impact of Inaccurate Data
Incorrect or outdated data can cause:
- Rejection of applications for Tax Directives SARS from SARS
- Banking validation failures
- Compliance risks
- Escalations and extended processing times
- Avoidable operational delays for employers, administrators and members
How Employers Can Prevent Delays
- Keep passport and permit details up to date
- Verify all personal, employment and tax details before submission
- Update changes immediately via the Sanlam Corporate Portal
- Train HR/payroll teams on data accuracy
- Engage CRMs early for support
Accurate data ensures fast, compliant benefit payments and protects the employer, the fund and the member.