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Unclaimed retirement benefits – The dust should not settle

In May 2019, Rosemary Lightbody, the senior policy adviser at ASISA, indicated that despite the efforts already made by member companies, it is estimated that unclaimed assets worth R17.1 billion held in 147 221 products still need to be returned to its legal owners.

ASISA’s Standard on Unclaimed Assets encourages member companies to take appropriate action such as:

Attempting to make telephonic and electronic contact with customers following a trigger event;
Attempting to trace customers via internet and social media searches; and
Engaging external tracing agencies.

In a recent media report in the Sowetan, it is reported that, in total, 4.5 million South Africans have R42bn in unclaimed retirement savings and insurance policy benefits.

In the article, Metropolitan’s head of Life Event Solutions, Deidre Wolmarans, explains that unclaimed benefits can occur for several reasons. For example, the contact details on record may be incorrect or beneficiaries may not be aware of the benefits due to them.

“The legislated definition of unclaimed benefits is a benefit that has not been paid to or claimed by a member within 24 months from the date it became due for payment or claiming,” she said. “While most insurers are trying to trace beneficiaries, the process is slow and more needs to be done.”

The Registrar of Pension funds also provides a central database on the FSCA website to assist members of the public to ascertain through the search engine if there are any unclaimed benefits due to them. Click here to access.

It is rather disconcerting to realise that these funds were also subject to poor returns in most of the past few years, and may have in fact been lagging behind the inflation rate after management and performance fees were deducted. Perhaps more direct regulatory intervention is required to address a serious issue in a country where poverty is such a serious problem.

Click here read the Sowetan article.

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