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ADJUDICATOR SLAMS PRIVATE SECURITY SECTOR PROVIDENT FUND FOR NOT TAKING ACTION AGAINST DEFAULTING EMPLOYERS

Published

2021

Wed

10

Feb

Regulatory compliance in the private security industry remains a sore point as more complaints land on the desk of the Pensions Funds Adjudicator.

 

The majority of the complaints prevalent in this sector relate to non-compliance with Section 13A of the Pension Funds Act whereby employers fail to pay provident fund contributions on behalf of the member to the pension fund.

 

In a recent matter, the complainant averred that his employer Volsec Security (second respondent) had failed to pay all provident fund contributions on his behalf to the Private Security Sector Provident Fund (first respondent) although provident fund contributions had been deducted from his salary as attested by his pay slips.

He was employed from 1 May 2010 to 3 May 2016 and was paid a withdrawal benefit of R5 237.53 by the first respondent in April 2017.

The first respondent submitted that it commenced receiving provident fund contributions on behalf of the complainant from May 2010 and the last contributions on his behalf were received in September 2011.

In her determination, the Pension Funds Adjudicator Muvhango Lukhaimane said the second respondent has a duty placed on it by the Pension Funds Act and the rules of the first respondent to pay contributions.

She found that the second respondent owed provident fund contributions on behalf of the complainant for the period September 2010, November 2010 and October 2011 to        April 2016. Thus, the second respondent failed to comply with Section 13A of the Act.

Ms Muvhango said she would like to emphasize that the first respondent is a vanguard of its members’ interests and a custodian of its rules. The first respondent has a duty to notify the parties of non-compliance with the provisions of Section 13A of the Act and report any non-compliance to the Financial Sector Conduct Authority (FSCA).

“The first respondent must also take other legal steps to recover arrear or outstanding contributions from the second respondent, including registering a criminal complaint with the authorities. There is no evidence that the first respondent initiated any action in terms of the Act.

“Thus, even under statutory management, the first respondent continues to fail to take action against defaulting employers and to discharge its obligations conferred by the Act.

“The first respondent must monitor and ensure that the second respondent complies with its duty to pay all provident fund contributions from here onwards as required in terms of Section 13A of the Act and report such failure to relevant authority,” said Ms Muvhango.

The second respondent was ordered to pay the first respondent the complainant’s arrear contributions, plus late payment interest. The first respondent was ordered to pay the complainant his outstanding withdrawal benefit.

In a separate determination handed down by the Pension Funds Adjudicator, it was found that Isolezwe Tactical Solutions (Pty) Ltd (second respondent) had been deducting pension contributions from one of its employees but failed to register that employee as a member of a pension fund or pay over the deductions that had been made from the employee’s salary.

 

The employee had been employed since 1 January 2020 and noticed that provident fund contributions payable to the Private Security Sector Provident Fund (first respondent) were being deducted from her salary.

 

Investigations conducted by the Adjudicator revealed that the first respondent had no record of the complainant.

 

The Adjudicator ordered the first respondent to register the complainant as its member and for the second respondent to pay the arrear contributions.

 

 
Source: The Office of the Pension Funds Adjudicator
 
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