The Pension Funds Adjudicator has taken to task an employer in the security sector for failing to remit all provident fund contributions on an employee’s behalf to the fund.
Muvhango Lukhaimane, the Pension Fund Adjudicator, ordered the employer Vetus Schola Boland (Pty) Ltd to pay arrear contributions plus interest to the Private Security Sector Provident Fund.
Lukhaimane also ordered the fund to allocate contributions to a paying member’s record and not to anyone else, irrespective of whether the employer owes other members.
This comes after a complainant complained that the employer deducted provident fund contributions from her salary without remitting the same to the fund. She stated that the fund informed her that the employer made only nine payments in 2019.
The Office of the Pension Funds Adjudicator (OPFA) is a statutory body established to resolve disputes in a procedurally fair, economical, and expeditious manner
The complainant started employment on February 25, 2019, until October 31, 2023. As of February 27, 2024, the complainant had a fund credit of R5 343.54.
According to the Office of the Pension Funds Adjudicator (OPFA), the fund said the employer was not compliant in terms of section 13A of the Act. The complainant was registered as its member on March 1, 2019 and had a fund credit of R5 343.54 as of February 27, 2024 representing provident fund contributions for June 2019 to November 2019. The contribution schedule reflected the allocation of contributions to risk and administration expenses for March 2019 to May 2019.
“The fund provided a computation which reflected an arrear amount of R39 477.18 for December 2019 to October 2023, plus late payment interest of R18 845.52 calculated up to 22 April 2024.
“The employer submitted that all declarations of provident fund contributions had been made to the fund every month. It submitted that it was in arrears with its provident fund contributions due to an error by a third-party supplier where submissions to the fund and deductions from the payroll were not correct, causing a discrepancy in what was paid over,” the OPFA said.
The employer claimed that the fund informed employees that they were not registered when this was in fact incorrect. It submitted that the fund indicated that it would not accept part payments; any payments made to the fund were allocated to the oldest outstanding contribution record and not to the members. It submitted that it relied on the adjudicator to assist in instructing the fund administrator to allocate specific funds to specific people to avoid any inconvenience to those members who have left service, it said.
Lukhaimane said an employee entering the private security sector for the first time and an employee who has been out of the sector for more than six months shall be required to wait for a period of four months before joining the fund. An employee with at least four months of uninterrupted service in the private security industry, not necessarily with the same employer, shall join the fund immediately upon joining a new employer.
She said the employer ought to have paid contributions towards risk and administration expenses for March 2019 to June 2019 and provident fund contributions from July 2019.
“The submissions indicated that the employer commenced paying provident fund contributions in June 2019. Therefore, the employer was bound by the rules from June 2019,” she said.
According to Lukhaimane, the employer submitted that it was in arrears with its provident fund contributions due to an error by a third-party supplier. However, she said, this was an internal issue with the employer which did not absolve the employer of its duty to pay contributions.
The employer was ordered to pay to the fund the amount of R39 477.18 representing arrear contributions for December 2019 to October 2023. The fund must allocate this amount to the complainant’s record and no one else irrespective of whether the employer owes for other members. If the fund wants outstanding contributions for all members, it must follow its rules and the Act to recover these, instead of piggybacking on the complainant.
“The fund also was ordered to compute the amount of late payment interest due on the arrear amount and provide the same to the employer for payment. The fund was ordered to pay the complainant the fund credit of R5 343.54 representing provident fund contributions for June 2019 to November 2019,” the OPFA said.
PERSONAL FINANCE