The Private Security Sector Provident Fund (the Fund) has announced that employer non-compliance has reached the scale of a national crisis, with more than six out of every ten participating employers found to be non-compliant as at 31 July this year, either failing to pay over contributions deducted from workers’ salaries, submitting incomplete or inaccurate schedules, under-declaring employees, or, in some cases, operating without even being registered with the Fund.
According to the Fund’s most recent compliance figures, approximately 61% of employers in the private security sector were non-compliant, meaning the vast majority of the Fund’s roughly one million members are exposed, in some way, to the risk that contributions deducted from their pay may not have reached the Fund.
Sipho Sidu, Principal of the PSSPF says, “Employer non-compliance is a systemic and material industry challenge. This is not a problem limited to a handful of isolated employers. It affects members across all regions of the country. Non-compliance is a crime. We are working with law enforcement agencies to bring these employers to book.”
Enforcement action underway
The Fund confirmed that more than 2000 participating employers have been listed as being in arrears by the Financial Sector Conduct Authority (FSCA). In response, the Fund is intensifying recovery efforts through the appointment of attorneys and debt collection agencies, and has made progress in recovering arrear contributions and late payment interest from defaulting employers.
In the 2025/26 financial year alone, the Fund lodged criminal cases against 3,025 non-compliant employers with the South African Police Service (SAPS), with the top 50 worst offenders escalated to the Commercial Crimes Unit for investigation.
“Where an employer deducts contributions from workers’ salaries but fails to remit them to the Fund, that employer has illegally withheld those monies,” added Sidu. “These monies must be recovered from the companies and their directors, failing which the Fund will institute criminal proceedings.”
Where the breakdown happens
The disconnect between a payslip deduction and an actual benefit payout can occur at several points along the contribution chain. An employer may deduct an employee’s contribution but fail to remit it, or remit it without accurate supporting schedules, creating a mismatch between what a member believes was contributed and what the Fund can verify on its records. Incorrect employee details, missing schedules, job-hopping within the industry, and unresolved employer arrears further complicate reconciliation and delay the validation of benefits.
“It would be inaccurate to attribute the problem to one party alone. The primary challenge is often employer non-compliance. However, we also recognise there are internal processes, data and system challenges within the Fund and its administration that must be addressed. The appropriate response is to strengthen controls across the entire chain, employer compliance, contribution reconciliation, data quality, administration, claims processing and escalation — while holding each party accountable for the part of the process within its control,” concluded Sidu.
Root causes and the road ahead.
The recovery challenges are attributed to a combination of employer non-compliance, financial instability, business rescue and liquidation processes, and the high mobility of employees within the private security industry, which makes it difficult to maintain accurate membership records. Internally, the Fund acknowledged that data quality, fragmented systems, manual processes and gaps in end-to-end contribution monitoring can delay the identification and resolution of arrears, while the cost of litigation and recovery activity also affects enforcement.
The Fund said it is prioritising improvements across the full member-benefit lifecycle, including data cleansing, contribution reconciliation, employer compliance monitoring, claims administration and member communication, to ensure benefits are paid accurately, efficiently and within regulatory timeframes, while addressing root causes rather than resolving complaints in isolation.
Sidu concluded, “Addressing these challenges requires a holistic, coordinated approach involving employers, the Fund, the Administrator, regulators and industry stakeholders, supported by stronger data governance, integrated systems, proactive employer monitoring, clear escalation processes and consistent enforcement of statutory obligations.”
