Johannesburg - The Security Sector Provident Fund (PSSPF) is litigating against 78 security firms to recover over R1.5 billion in funds deducted from salaries of personnel and not paid over to it.
The PSSPF has about 300 000 members out of a total security industry workforce of 450 000 and a total of R5.4bn in funds under management on behalf of its members, according to PSSPF trustee Jackson Simon.
Launching its nationwide private security sector compliance campaign in Johannesburg yesterday, PSSPF chairman Robert Dube said the legal action would see the private security firms closed down if they failed to comply with the financial requirements.
“The fund currently receives contributions from some 800 employers equating to R1bn annually. This is despite of another 250 000 security employee’s contributions not being received by the fund through fraud perpetrated by some employers. The loss to members translates to approximately R1.5bn in contributions.”
PSSPF communications consultant Sindiswa Changuion, confirmed that some security officers on retirement had filed for their pension claims only to be paid nothing because the employer had never paid over the funds deducted over a 25-year career to the PSSPF.
The PSSPF has refused to pay at least 3 289 funeral claims amounting to R30.4 million because the funds were not paid to it, as well as 1 885 lump sum claims for death benefits amounting to R102m. The figure excludes personnel employed by fly-by-night companies that are not registered.
The PSSPF is banking its hopes on amendments to the Financial Services Laws General Amendment Act, which make it a criminal offence to be a non-compliant employer.
The amendments will allow the PSSPF to hold company shareholders, members in a closed corporation and partners personally liable in honouring debts toward employees, or it can issue fines of up to R10m, imprisonment or both.
Dube said acts of non-compliance included employers not registering with the fund and not making deductions; registering with the fund and collecting money but not paying it over; registering with the fund but paying for a limited number of contributions of employees; as well as only making sporadic contributions to the fund.
He said so far about 170 companies had filed acknowledgments of debt agreements with over R180m secured, of which R110m had been paid to the PSSPF.
“Various matters are also in court and being pursued to recover members’ monies. The recovery process involves negotiation for the recovery of funds, (and) where this is unsuccessful, it is followed by litigation,” Dube said.
He said although the PSSPF did not have statutory power to conduct inspections or engage with employers, it had formed a collaboration with the Private Security Industry Regulatory Authority (PSIRA) and the Department of Labour to jointly tackle issues of non-compliance in the sector.
Since its inception in 2002, the PSSPF said it had paid more than 267 779 claims, including more than 258 651 withdrawal claims, 7 144 death claims and more than 1 984 retirement claims, all of which amounted to R1.8bn.
Dube said the PSSPF had made strides in addressing a backlog of 80 000 claims through its claims sub-committee by utilising trace agents.
“Of the 80 000, more than 70 percent of these claims have been finalised. The remaining claims will be finalised by the end of August. Out of the 70 percent claims finalised, 60 percent have been settled and 40 percent have been transferred to the unclaimed benefit fund.”