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Johannesburg - Intervention by regulatory authorities as well as legislative amendments are required for the authorities to take quicker action against employers failing to pay over members' contributions to their pension funds.
It is the responsibility of pension fund trustees to inform the prosecution authorities and the Financial Services Board (FSB) if employers delay or neglect paying pension fund contributions over to the funds.
Minister of Finance Pravin Gordhan on Monday responded to a question from the DA, saying that trustees should report these failures and not depend on the FSB to do so. His response comes only days after the FSB announced that it had appointed new administrators and trustees for the Private Security Sector Provident Fund (PSSPF).
The new chairperson and vice-chairperson have specifically been charged with investigating the remuneration of, and expenditure by, previous trustees, as well as allegations of irregularities within the fund administrator.
In October NBC, the administrator of the PSSPF said the biggest problem at the fund was that 25% of the 2 000 employers in the security industry were not paying over pension fund members' contributions.
Shantha Padayachee, president of the Institute of Retirement Funds (IRF), says trustees accept and are aware of their responsibility to report non-payment by employers.
The problem is, however, that a drawn-out legal process is involved. If the employer's cash flow problems are the reason for non-payment, by the time the legal process has been concluded it is too late to salvage anything for the employees.
Padayachee says the regulators need to look for alternative mechanisms to the court process so as to expedite cases of employers' non-payment.
- Sake24.com
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