Over R42 billion of retirement money remains unclaimed, which – according to the Financial Sector Conduct Authority (FSCA) – accounts for 1.8% of all retirement money. Over the last few years, efforts have been made by administrators of retirement funds and the FSCA to trace individuals and family members who are owed retirement benefits. In the last five years, R18 billion was paid to 680 000 members, with an average amount of R26 787 per member.
However, it appears that the easy work has been done and it is becoming more challenging to trace beneficiaries due to a lack of documentation. In cases where members or their beneficiaries have documentation such as pay slips or member statements, these claims have mostly already been paid. Tracing agents hired by the fund administrators have managed to find the members, or the members have already approached the retirement fund or FSCA due to the high level of awareness around unclaimed benefits. Nevertheless, a problem does remain in rural areas where the lack of formal addresses has made it difficult for tracing agents to find the members.
The challenge arises for members or beneficiaries where documentation is not available or where it is difficult to identify the member. This is especially true for migrant workers who make up a large percentage of the workforce. If they were employed either as illegal immigrants, or were not willing to provide their actual names and identification numbers, the fund would not have their accurate details, making it difficult to trace them or their beneficiaries. It is also problematic for their beneficiaries to prove their claim. The FSCA raised a concern that this practice of not having sufficient member details continues in the mining, motor, metal and engineering industries.
Apart from poor record-keeping by fund administrators, the FSB says members themselves are not providing the fund with updated contact details for themselves and their beneficiaries. There is also a trend for members not to inform their dependents that if they die in service, there may be benefits payable or to inform the dependents which institution to contact.
If you believe you are entitled to an unclaimed benefit, before you get too excited, be aware that over 1 million members (26.46%) have an unclaimed benefit of less than R250. In these cases, the member most likely had already claimed their funds but some interest or a late payment had accrued to their account subsequent to the withdrawal.
How to investigate a claim
Do not pay someone money to trace the money for you, because the FSCA offers such a service for free. The FSCA says that there are “various unscrupulous operators who persuade members of the public to pay them an amount (eg, R1200) to trace their money. These are often empty promises, and there is absolutely no guarantee that the person paying that amount is due any money.”
Your first query should be with the retirement fund or HR department of your former employer. Only if you do not know which fund you or your family member belonged to, should you contact the FSB.
The FSCA has launched a search engine on their website for members of the public to ascertain if there are any possible unclaimed benefits due to them. This facility can be accessed either through the FSB website or by sending an e-mail or fax. An SMS line will be launched by the end of September.
Over and above this, members can still send a letter, contact the toll-free call centre or visit the FSB Office to obtain assistance. Should there be any possible benefits identified during the enquiry, a person will be provided with the relevant contact details of the fund or administrator to lodge a formal enquiry. These services are provided by the FSB free of charge.
Toll-free number: 0800110443 / 0800202087
Fax number: 0865781183
Keep track of your money
This article first appeared in City Press.