As a result of Covid-19, many retirement funds amended their rules so that employers could pay contributions at a lower rate. One such fund was the Private Security Sector Provident Fund (PSSPF), which amended its rules to allow employers to pay contributions at 5% from September 2021 to March 2023.
Pension Funds Adjudicator Muvhango Lukhaimane (pictured) said some employers have been deducting higher amounts from employees’ salaries while remitting a lower amount to the fund. Also, some employers continued to remit the lower rate even though the Covid period concession had passed.
Lukhaimane found that Bamogale Enterprise (Pty) Ltd deducted a higher amount from the complainant’s salary and paid a lower amount in contributions to the PSSPF.
She ordered the employer to pay the fund all arrear contributions, as computed by the fund.
The complainant submitted that after perusing his contribution statement, he noticed that the employer deducted R342.53 from his salary but contributed R228.35 to the fund.
In addition, he said the employer had been deducting contributions since December 2021, but the statement from the fund indicated there were no contributions to the fund.
The fund submitted that the complainant became its member on 1 March 2020. It provided the complainant’s transaction history, which showed he had a fund credit of R10 634.14 on 17 February 2023, representing contributions for March 2020 to October 2022.
The schedule indicated that contributions for May 2020 to September 2020 were at a lower rate than prescribed.
The PSSPF submitted that the complainant was in arrears of R4 556 for December 2019 to February 2020 and November 2022 to January 2023, plus late payment interest of R1 803.38 calculated to 14 April 2023.
The employer was granted an opportunity to comment on the allegations made against it. However, no response was received, Lukhaimane said.
What the Adjudicator found
In her determination, Lukhaimane said the employer had also failed timeously to register the complainant with the fund and pay all contributions on his behalf. The complainant started employment on 1 December 2019 and was registered with the fund on 1 March 2020.
“On the evidence submitted, the employer is ordered to pay the arrear amount of R4 556 for December 2019 to February 2020 and November 2022 to January 2023,” she said.
The contributions fluctuated for May 2020 to September 2020. The complainant provided a pay-slip for September 2021 showing that the employer deducted contributions of R342.53 and remitted an amount of R228.35. He provided another pay-slip for October 2022 reflecting a deduction of R358.95 and a contribution payment of R239.30.
“Therefore, the employer failed to pay contributions in terms of the rate as prescribed in the rules. The employer should start deducting the correct contribution rate as per the fund rules from May 2023 going forward.
“The employer is also ordered to submit the outstanding contribution schedules in respect of the complainant for February 2023 to date, to the fund in order for it to facilitate the computation of arrear contributions within five weeks of this determination,” Lukhaimane said.
