During 2020, the Financial Sector Conduct Authority, in recognition of the financial predicament of many companies and consumers, allowed companies to temporarily suspend or reduce contributions made to retirement funds on behalf of their employees. The Private Security Sector Provident (PSSP) Fund was one of many retirement funds that amended its rules to allow employers to pay contributions at a lower rate (5%) from September 2021 to March 2023. 

However, the Pension Funds Adjudicator (PFA), Muvhango Lukhaimane, notes that some “opportunistic employers” have continued to remit the lower rate even though the Covid-period concession has long since passed. Other employers, such as Bamogale Security Solutions, have been deducting higher amounts from employee salaries while remitting a lower amount to the PSSP Fund as recently as this year.

Lukhaimane has ordered Bamogale to pay the fund all arrear contributions, as computed by the fund, in the case of the following complaint: 

After reviewing his contribution statement, the complainant noticed that although Bamogale had deducted R342.53 from his salary, it had only contributed R228.35 to the retirement fund. He also found that although his employer had been deducting contributions from his salary without fail, it had not paid contributions from December 2019 to February 2022, and again from November 2022 to January 2023.

According to the PSSP Fund, the complainant only joined the fund on 1 March 2020. This showed that Bamogale had failed to timeously register the complainant with the fund when he started working at the company in December 2019. His fund credit of R10,634.14 as of 17 February 2023 represented his provident fund contributions from March 2020 to October 2022. 

The schedule indicated that reduced contributions had been received from May 2020 to September 2020. The complainant’s fund also reflected arrears of R4,556 for December 2019 to February 2020 and November 2022 to January 2023 plus late payment interest of R1,803.38 as calculated up to 14 April 2023.

Although Bamogale was given the opportunity to comment on the discrepancies, the company did not submit any response to the PFA. The disgruntled employee was able to provide pay slips showing evidence of the deductions made and a fund statement showing the actual contributions paid over, clearly showing a discrepancy. 

Lukhaimane ordered the employer to submit the outstanding contribution schedules to the fund so that it could calculate the amount of arrear contributions due within five weeks of the ruling.

What you need to know 

Your retirement fund contribution statement should include the following information:

• Your employee number;
• Your tax number;
• Your contact details, including your cellphone number, postal address and residential address;
• A record of contributions received each month from you and your employer;
• Monthly fees charged;
• An opening balance, investment returns and closing balance; and
• Details of any additional voluntary contributions, or corrections due to error.

You should also regularly check the nominated beneficiaries on your retirement fund. If you have divorced your spouse and have not changed the beneficiary details three months after the divorce, the fund will recognise your former spouse as a beneficiary. 

Unlike life insurance policies, which are bound to make payments to the beneficiaries you have nominated, the trustees of your retirement fund have the discretion to choose how your retirement fund benefits are distributed when you die. You can nominate one or more beneficiaries and when you die, anyone who can prove they were financially dependent on you can make a claim. DM/BM