Private security provident fund reprimanded for failing member

The Pension Funds Adjudicator has lambasted the Private Security Sector Provident Fund (PSSPF) for failing to enforce an earlier ruling to ensure Sakhile Ezweni Group pays an employee’s pension contributions on time.

The statutory regulator expressed its displeasure with the fund on Thursday when adjudicator Muvhango Lukhaimane criticised PSSPF for failing to perform its “most basic task” and called its monitoring systems into question.

Lukhaimane took issue with the fund for not assisting a complainant to enforce an earlier determination against the non-compliant employer.

According to the adjudicator, the complainant in the matter was employed by security company Sakhile Ezweni between 1 August 2017 and 31 August 2022.

She lodged a complaint with the adjudicator in which she alleged that her employer had failed to remit all provident fund contributions, despite deducting monthly contributions from her salary.

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Lukhaimane handed down a determination on 20 November 2019, ordering the fund to register the complainant as its member from 01 August 2017.

The employer was ordered to pay outstanding contributions for August 2017 to November 2019. However, the determination was not enforced.

In her latest determination, Lukhaimane only addressed the issue of the employer’s failure to pay provident fund contributions due on behalf of the complainant to the fund for the period of December 2019 to August 2022.

Interest and contributions owed

The fund submitted that Sakhile Ezweni owes an amount R38 649.84 in outstanding contributions for December 2017 to April 2019, and June 2019 to August 2022, together with late payment interest of R21 868.72 calculated up to 20 January 2023.

Since this includes the outstanding contributions from August 2017 to November 2019 covered in her earlier determination, Lukhaimane did not issue a determination in monetary terms.

She ordered the fund to recalculate the employer’s outstanding contributions from August 2017 to November 2019 and Sakhile Ezweni to settle the outstanding contributions, and then to pay the complainant a withdrawal benefit once these have been settled.

“It is not exactly clear how the fund goes about fulfilling this crucial role as in this instance it failed to do anything to assist the complainant to enforce the determination even though it is the duty of the fund to ensure that the employer pays contributions timeously,” Lukhaimane said.

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“The fact that the fund provided an amount of outstanding contributions inclusive of the period covered by the previous determination, goes to show that not only does the fund not follow-up on judgments granted, it also does not keep proper records.

“This is an instance where a member is trying to protect her rights, meanwhile the fund is unable to perform one of its most basic tasks, let alone come to the aid of a proactive member,” she added.

She further ordered the fund to monitor and ensure that the employer complies with its duty to pay all provident fund contributions from here onwards as required in terms of section 13A(6) of the Act.

Shrouded in controversy

Last year, the PSSPF also had a run in with the Financial Services Conduct Authority (FSCA) after the regulator found, among other issues, that the fund had deviated from the set procurement process, that board members had been remunerated rates above the stipulations of remuneration policy, and that they had been paid for attending events.

As a consequence of failing to protect the interests of its members and managing the fund’s resources appropriately, the FSCA imposed administrative penalties on some board members and removed others.

The PSSPF had not responded to a request for comment at the time of publication.

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