PFA bemoans conduct of Mafoko Security Patrols

07 November 2023 The Office of the Pension Funds Adjudicator (OPFA)
Naheem Essop

Naheem Essop

The Office of the Pension Funds Adjudicator has been inundated with almost 1000 complaints by security officers about their employer Mafoko Security Patrols who they say deducted contributions from their salaries but did not pay it over to the fund.

Since the beginning of 2022, a total of 944 complaints have been received against the security company that participates in the Private Security Sector Provident Fund (PSSPF).

The company appears to employ its staff on a fixed term basis and as staff near the end of their contract or soon after they have left, they make enquiries with the PSSPF regarding their withdrawal benefits from their pension fund. It is only at that stage that they become aware that Mafoko has been deducting contributions from their salaries and not paying it over to the fund. Some employees find that they have not even been registered as a member of the PSSPF notwithstanding that deductions were made from their salaries for the purpose of contributing towards the fund.

Mafoko also participated in the Alexander Forbes Retirement Fund but that participation was liquidated with effect from 31 March 2021, after it failed to pay contributions there as well. Since the PSSPF is a compulsory fund for the private security sector, the option of liquidation is not available in the PSSPF. Therefore, employees continue to have contributions deducted from their salaries without same being remitted to the fund. The non-payment of retirement fund contributions by an employer constitutes a criminal offence in terms of the Pension Funds Act.

The Deputy Pension Funds Adjudicator, Naheem Essop, is familiar with Mafoko complaints and says that when a complaint is served on Mafoko, no response is received. The complaint is then finalised in the absence of submissions from Mafoko and the employee then tries to enforce the orders granted.

Recently, the Office of the Pension Funds Adjudicator has received numerous High Court applications brought by Mafoko interdicting the enforcement of the orders and then seeking a remittal of the matter to the OPFA. There does not appear to be any dispute as to Mafoko’s liability. However, it disputes the calculation of the amount it owes, which calculation is done by the PSSPF after the Adjudicator’s order is issued.

Essop says that this will result in a circuitous never-ending process which would benefit only the lawyers, not the employees, and will place undue strain on the OPFA’s already limited resources.

“It is regrettable that Mafoko does not address any issues that it wants to raise when it is given the opportunity to do so during the OPFA’s investigation. Resorting to High Court litigation against its current or former employees, most of whom are security officers who are unable to afford same, is highly undesirable conduct,” said Essop.

So far, the OPFA has been served with 39 such High Court applications during 2023 alone. In an attempt to stem the tide, Essop says that he wrote to Mafoko’s attorneys on 24 July 2023 and proposed a meeting to discuss these matters and the approach going forward so that such applications could be avoided in the future. However, he did not receive any response from the attorneys. Nevertheless, the applications continued to flow from the attorneys’ office.

Due to the sheer volume of High Court applications and the potential to place stress on the limited OPFA resources if such matters are remitted, the OPFA decided to file explanatory affidavits in the various matters to place the facts before the Court and to also instruct counsel to appear on a watching brief.

“We are fortunate to have legal representatives, including senior counsel, who are willing to assist us on a pro bono basis in all the said matters. We are hopeful to find a resolution to the impasse that is acceptable to all parties.”, said Essop.

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