The Pension Funds Adjudicator has seen a 13% increase in the number of new complaints in the past financial year, largely affecting security guards.
The adjudicator, Muvhango Lukhaimane, said the spike was the result of the implementation of the two-pot pension system in September last year.
In her 2024/25 annual report released on Monday, Lukhaimane noted a rise in noncompliance where employers repeatedly fail to pay over their retirement fund contributions. This has remained a prevalent issue, which accounted for up to 44.34% of all complaints investigated and closed in the past year.
The complaints concerning withdrawal benefits constituted 38.79% of all complaints received, Lukhaimane said.
The adjudicator said the pensions dispute resolution forum received 10,331 new complaints compared with 9,177 the previous year and that her office had finalised 10,100 disputes. She said most complainants only discovered that their employers failed to pay contributions when they wanted to withdraw their benefits.
Employers in the private security sector who deduct retirement fund contributions from their eligible employees’ salaries are not able to manage their finances properly
— Muvhango Lukhaimane, Pension Funds Adjudicator
“The Private Security Sector Provident Fund (PSSPF), in particular, also added to the surge in new complaints,” Lukhaimane said.
“Private security companies are obliged to participate in the PSSPF. Employers in the private security sector who deduct retirement fund contributions from their eligible employees’ salaries are not able to manage their finances properly.
“Additionally, the PSSPF does not appear to have a proper monitoring system in place to detect nonpayment of contributions by employers and has also consistently failed to act against defaulting employers.”
Last year Sowetan reported that security companies, retailers, municipalities, a church and a renowned fashion designer were among the more than 3,000 employers exposed by the Financial Sector Conduct Authority for not paying their contribution to pension funds in 2023. Some have failed to do so for 21 years.
When the two-pot system was implemented last year, Lukhaime said the system would expose many noncomplying employers. The two-pot system allows members of retirement funds to have access to money from their savings component without leaving their employment.
The adjudicator received 239 two-pot-pension-related complaints from September 2024 to March 2025.
“While the implementation of the two-pot system has been successful, a further rise in complaints related to two-pot withdrawals is anticipated in the 2025/26 financial year, prompting our office to prioritise resource allocations and proactive stakeholder engagement,” Lukhaimane said.
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