The FSCA is ramping up its efforts to trace unclaimed benefits and wants retirement funds and administrators to provide it with information, every three months, about their paid-up members, in addition to information about unclaimed benefits.
According to the FSCA’s 2020/21 annual report, more than R47 billion in unclaimed benefits is due to some 4.8 million beneficiaries.
Information Request 2 of 2022 (RF), published on 7 March, is a sequel to Guidance Notice 1 of 2018 in which the FSCA asked retirement funds to provide it with data on unclaimed benefits every three months.
The Authority says it want to enhance its Unclaimed Benefit Search Engine by creating a register of paid-up members (deferred pensioners).
It also wants to create a baseline for monitoring the impact of regulation 38 (often called the “default” regulations) of the Pension Funds Act on member behaviour and how the retirement fund industry is implementing regulation 38.
The FSCA expressed its displeasure with funds and administrators that fail to respond to the enquiries about unclaimed benefits the Authority receives from the public. Some funds and administrators only respond after the deadline and after several requests. In some cases, the responses are unsatisfactory, the FSCA said.
It was also unhappy with funds and administrators that said no benefit was due but did not state whether this was because the member has been paid the benefit or because the individual never belonged to the fund.
“In certain cases, a member will provide proof that they were a member of the fund, but the fund provides a response stating that the individual was a never a member of the fund,” the FSCA said.
In its annual report, the FSCA said the number of unclaimed benefits enquiries it received increased from 61 800 in 2020 to 106 700 in 2021.
What the FSCA wants to know
The FSCA has given funds and administrators until 6 May to:
- Review and, where necessary, update previously uploaded unclaimed benefit and/or paid-up member benefit information on the Authority’s database; and
- Submit information relating to paid-up members and/or unclaimed benefits not previously reported to the Authority.
After 6 May, funds and administrators must provide the FSCA will the following information at least once every three months:
- The original value of the unclaimed benefit or paid-up member’s benefit – that is, the amount in the member’s minimum individual reserve on the date on which the member left the service of his or her employer;
- The current value or paid-up value of the unclaimed benefit or the paid-up benefit – that is, the amount in the member’s minimum individual reserve on the last day of each quarter; and
- The date on which the unclaimed or paid-up benefit was paid to the member or his or her beneficiaries, or the date on which the benefit was made unclaimed or paid-up.
The spreadsheets and instructions for complying with the information request can be downloaded from the FSCA’s website: www.fsca.co.za > Regulatory frameworks > Notices > Retirement funds > 2022.
The FSCA warned that anyone who fails to provide information required in terms of the Pension Funds Act could be fined up to R10 million or imprisoned for up to 10 years.
Supervised entities that do not comply with a notice issued in terms of section 131(1) of the Financial Sector Regulation Act can be fined up to R1 000 a day for as long as the offence continues.