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Statutory management of security sector fund fails to improve employer compliance

19 March 2021 The Office of the Pension Funds Adjudicator (OPFA)
Muvhango Lukhaimane

Muvhango Lukhaimane

A pension fund has been requested by the Pension Funds Adjudicator to notify some of its members of the failure of their employer to pay contributions on their behalf and to report the non-compliance with the Act to the National Prosecuting Authority.

Muvhango Lukhaimane, the PFA, said regulation 33(5) of the Pension Funds Act authorised the Private Security Sector Provident Fund (first respondent) to lay a criminal complaint against defaulting participating employers.

An employee complained to the PFA about the failure of his employer, Huntrex 116 (Pty) Ltd (second respondent), to pay all provident fund contributions on his behalf to the first respondent.

“The said regulation stipulates that if any failure to transmit contributions continues for 90 days, the monitoring person shall report the matter to the National Prosecuting Authority.

“It does not appear that the first respondent laid a criminal complaint against the second respondent for non-compliance with the provisions of section 13A and Regulation 33(1) of the Act to the NPA.

“Thus, the first respondent must notify its members of the failure of the second respondent to pay contributions on behalf of its employees and report it for non-compliance with the provisions of section 13A and Regulation 33(1) of the Act to the NPA,” Ms Lukhaimane ruled.

Ms Lukhaimane further indicated that, even under statutory management, the first respondent continues to fail to take action against defaulting employers and to discharge its obligations conferred in terms of the Act.

The complainant who has been employed with the second respondent from 1 March 2018 submitted he is dissatisfied that the employer deducts monthly provident fund contributions from his salary and fails to consistently remit same to the first respondent.

The first respondent submitted that it commenced receiving provident fund contributions on behalf of the complainant from 31 March 2018 and the last contribution on his behalf were received on 31 January 2019.

The second respondent was granted an opportunity to resolve the complaint and a further opportunity to comment on the allegations made against it. However, no response was received from it.

In her determination, Ms Lukhaimane said the second respondent owes provident fund contributions on behalf of the complainant for the period February 2019 to date. Thus, the second respondent failed to comply with rules 4.1.1 and 4.1.2 of the first respondent’s rules and section 13A of the Act.

She ruled that the complainant must be placed in the position he would have been in had the second respondent paid all the contributions due on his behalf to the first respondent.

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

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