Fund guards members

2009-09-26 12:47

A PROVIDENT fund representing 200 000 ­security guards is fighting back against ­employers who are not passing on to the fund monies deducted from their members’ salaries.

The Private Security Sector Provident Fund (PSSPF), which has R1.1 billion in its coffers, has already pushed for the prosecution of a Port Elizabeth employer who was recently sentenced to four years’ imprisonment for failing to hand over to the fund the monthly premiums he deducted from his workers.

“We are currently finalising a High Court action against a number of employers. We are pleased that a court action was taken against a particular employer who was compelled through a court order to pay all arrear contributions, including interest,” said ­Peter Zibi, principal officer for the PSSPF.

The office of the Pension Funds Adjudicator (PFA) is being flooded with complaints from members who have had their claims repudiated by the fund and its administrator, Negotiated Benefit Consultants (NBC).

Just this month alone, the outgoing PFA, Mamodupi Mohlala, has made more than 400 rulings against the fund and the NBC. The two have been ordered to make benefit payouts to the claimants plus 25% interest.

But Zibi told City Press Business that the root cause of PSSPF’s problems was directly related to security guard employers defrauding their workers.

“It is a fact that numerous registered security companies defraud their employees by deducting monies from their wages and then claiming that these contributions, together with the employers’ contributions, are being paid to the fund,” Zibi said.

The non-payment of these contributions has resulted in the repudiation of many death, disability and pension payout claims by the fund.

“The impact of this fraudulent practice is that beneficiaries such as spouses and children never receive the financial compensation they were expecting,” Zibi said.

Tony Mercer, an NBC executive director, said ever since the company assumed the administration of the fund more than seven years ago it had been plagued with problems ranging from non-payment of contributions to employers failing to submit contribution schedules electronically.

“The primary jurisdictional route for a member using the PFA would be to allege non-payment of a withdrawal claim. Most of these in fact cannot be paid because the fund has not received contributions or correct member data from his/her employer.

“This is a compliance issue that is out of the hands of the NBC. We can only work with the data and contributions we are given,” Mercer said.

He said over the years the administrator and the PSSPF had taken numerous steps to address the problem, including instituting legal action against errant employers, often at huge cost to the fund.

At present the fund has 200 000 members, but only 100 000 are paying contributions, according to receipts from NBC.

This means that the fund is half the size it is supposed to be.

About 1?500 employers are currently members of the fund, but there are thousands of employers who by law should join it. In 2007 more than 4 000 security companies were fingered by the PSSPF for defrauding security guards by not paying their ­premiums to the fund.

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