Advertise Here


IconAssociations & Institutes
IconBBBEE Consulting and Verification Agencies
IconBenefit Administrators & Investment Managers
IconBusiness Chambers
IconBusiness Process Management
IconBusiness Process Outsourcing
IconConsumer Protection
IconCorporate Governance
IconCredit Bureaus
IconDebit Order Collection Facilities
IconEducation and Training
IconHuman Resources
IconInformation Technology and Software Partners
IconPension Fund Trustee Liability Insurance
IconPension Fund Trustee Training
IconPension Funds Adjudicator
IconPolicy Administration
IconPolicy Trading
IconRegulatory Authorities
IconRetirement Funds registered by the FSB
IconRetirement Products
IconSocial Grants (Government)
IconSurveys and Research
IconTraining Courses & Workshops
IconTrust Establishment & Management
IconWellness Programs
Advertise Here
  Subscribe To »







Having been inundated over the last several years with volumes of complaints against the Private Security Sector Provident Fund (PSSPF) and its participating employers, the Pension Funds Adjudicator, Adv Muvhango Lukhaimane, has in a recent determination called into question the viability of the fund that is compulsory for employers of private security guards, and has asked the Financial Sector Conduct Authority to assess such viability.


Ms Lukhaimane was commenting in a matter in which KL Gcaba complained of the failure of the second respondent (Izikhova Security Services) to register her as a member of the first respondent (PSSPF) and pay contributions due on her behalf.


Employers in the private security sector are compelled by a Collective Agreement to register their employees with the PSSPF and pay monthly contributions to the fund on behalf of their employees.


Compliance with this legal obligation has proved to be challenging for many employers in the sector which is exacerbated when in turn fees for their services provided are not timeously by their clients which are sometimes government departments.


Such was the case in the recent determination by the Pension Funds Adjudicator where she ruled that Izikhova Security Services was still legally obliged to pay over pension contributions to the PSSPF and provide contribution schedules notwithstanding that it had alleged not to have been paid for its services by the Department of Social Development and had applied in 2019 to the Department of Employment and Labour for an exemption from the obligation to pay pension contributions. According to Izikhova, there had been no response to its application for an exemption.


In making her determination, Ms Lukhaimane said: “The issue raised by the second respondent (Izikhova Security Services) is very pervasive in this sector as employers conclude contracts with government departments and other clients, who delay with the payment for the services rendered.


“This is a cause for concern as it means that the second respondent would be unable to honour its obligations, including the payment of salaries to employees and provident fund contributions to the first respondent.


“Therefore, notwithstanding the nobility of a compulsory fund, the question that follows is whether this model of retirement funding, and the nature of the business of the employers in the sector, is the best suitable vehicle to realise the objects of a compulsory fund and the Act.”


She went on further to state that the PSSPF “…cannot fulfil this objective as its capacity is impaired by the late payment and/or non-payment of services provided by the employers to their clients, including government departments.


“This Tribunal has observed a trend (in several complaints it adjudicated upon against various employers) which is cumbersome on the employer’s ability to efficiently to comply with section 13A of the Act. Furthermore, central to the matter is the ultimate prejudice faced by the vulnerable employees in this sector. Thus, it is noteworthy for this Tribunal to refer its concerns in this regard to the Financial Sector Conduct Authority (FSCA) in order for the latter to perhaps assess the viability of a compulsory fund within the nature of business rendered by employers in the sector.”


What was also concerning is the conduct of the PSSPF in taking legal action against defaulting employers. The fund is currently under statutory management after findings of alleged abuse by the previous trustees of the PSSPF were made through an onsite inspection of the fund by the FSCA.


Those findings caused the FSCA to launch a High Court application to place the PSSPF under curatorship, however, those proceedings resulted in an agreed outcome between the then board of the PSSPF and the FSCA, placing the fund under statutory management.


Under those circumstances, it would be reasonable to expect that the PSSPF is being closely monitored by the FSCA, and given the regularity with which the Adjudicator receives complaints relating to the non-payment of contributions in the private security sector, it should be a focus area and cause for concern.


However, the Adjudicator emphasized that the PSSPF “has a fiduciary duty to act with care and due diligence to protect the interest of its members. Further, section 13A(6) of the Act places a further obligation on the first respondent (PSSPF) to report such non-compliance with the provisions of section 13A of the Act with the FSCA.


“The first respondent may also take other legal steps to deal with the second respondent’s default. There is no evidence that the first respondent initiated any action in terms of the Act. Thus, the first respondent failed to discharge its statutory obligations conferred by the Act,” said Ms Lukhaimane.


She ordered the first respondent to register the complainant as its member from 1 October 2018.


The second respondent was ordered to commence making provident fund deductions from the complainant’s salary with effect from April 2021. The second respondent was also ordered to pay to the first respondent the complainant’s outstanding contributions plus late payment interest.

The first respondent was also ordered to provide the complainant with her latest benefit statement, and one annually thereafter as long as her membership subsists.

Source: The Office of the Pension Funds Adjudicator (OPFA)
« Back to previous page Print this page » |

Breaking News »

SAIA Bulletin - May 2022

As the cold begins to bite, load-shedding continues to be the story of our lives in South Africa. For more than 14 years, electricity generation and supply have been interruptive to both the business fraternity ...
Read More »


Can I get the Municipality to Pay for Damage caused by Potholes?

There are not many hazards on the road loathed as much as that of the dreaded pothole. Whether the pothole is small enough to swerve out the way of or big enough to simply shred your tyre no matter what decision ...
Read More »


"Intentional" investing highlighted at recent AVCA conference

The AVCA conference in Senegal highlighted a number of themes, such as the effects of Covid, intentional investing and inclusivity   It was a wonderful experience connecting in person with members of ...
Read More »


Find out about the latest technology trends and challenges within the AML landscape

As technology changes and advances so does the game of money launderers. The role of emerging technology in financial crimes have the potential to make anti-money laundering (AML) and counter terrorist financing ...
Read More »


More News »


Healthcare »


Investment »


Life »


Short-term »

Advertise Here
Advertise Here

From The Glossary »


Funds Withheld:

The situation in which a ceding company retains a deposit of the premium due to reinsurer’s. It withholds a portion of the premiums due as a guarantee that a reinsurer will meet its loss and other obligations. Also referred to as deposits retained. Funds withheld is one way of putting the security in place for foreign reinsurance to be regarded as approved reinsurance under both of the Insurance Acts.
More Definitions »






Contact IG


Media Pack


RSS Feeds

By using this website you agree to the Terms of Use.
Copyright © Insurance Gateway (Pty) Ltd 2004 - 2022. All Rights Reserved.