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Here’s how to get your share of the R42-billion in unclaimed retirement benefits

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You may be owed a portion of R42-billion worth of unclaimed benefits sitting in the retirement fund industry. Here’s what you need to know:

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First published in the Daily Maverick 168 weekly newspaper.

The retirement fund industry has estimated that at least 4.8 million people in South Africa have not claimed money owed to them.

An unclaimed benefit is any benefit that was due to you from a retirement fund in terms of the rules of the fund that is not claimed by you or your beneficiary within a period of 24 months from the date the benefit became legally due and payable to you. Unclaimed benefits include benefits such as:

  • Withdrawal benefit – these are as a result of termination of employment, retrenchment or resignation.
  • Death benefit – where the beneficiary was identified but does not claim their benefit.
  • Surplus benefit – these benefits become payable as a result of a distribution of surplus in the fund to active and former members of the fund.
  • Retirement benefit – these benefits are as a result of retirement from the fund.

For more than a decade, the Financial Sector Conduct Authority (FSCA) and retirement fund administrators have been trying to address this issue by raising awareness and introducing a search engine where you can check if there are any unclaimed benefits due to you.

Since the implementation of the benefits search engine, about R1.2-billion in asset value has been paid to more than 14,000 members after valid claims were submitted to the relevant funds.

Takalani Lukhaimane, the manager of retirement funds: conduct supervision at the FSCA, told a recent media briefing that the reasons for unclaimed benefits included:

  • Migrant workers;
  • Inaccurate member data;
  • Outdated or missing contact details; and
  • Poor administration or record-keeping by administrators.

About 60% of unclaimed benefits in occupational funds (employer funds) belong to former employees who were members of the retirement funds in the mining, motor, metal and engineering industries.

Despite the efforts of the industry and the FSCA to encourage the uptake of unclaimed benefits, these assets increased from 1.67% of the total assets of retirement funds in 2018 to 1.7% in 2019.

Although this may sound like a small percentage, the numbers say otherwise. Lukhaimane said unclaimed benefits funds had 919,656 members with assets of R9.6-billion for the 2019 financial year alone.

Retirement fund administrators are also doing their part to track claimants. Kabelo van der Merwe, the project lead for unclaimed benefits at Liberty, says the company estimates it has more than 200,000 former fund members who still need to claim their share of a pooled R2.3-billion.

Liberty has deployed a tracing task force comprising a number of tracing agents to find these beneficiaries.

“One of the recent additions to the tracing task force is Transaction Capital Recoveries, a leading provider of credit management services, known for its extensive consumer database.

“Liberty has successfully traced and paid more than R380-million in assets since 2018 to members and beneficiaries,” she said.

The Association for Savings and Investments SA (Asisa) introduced an industry standard for dealing with unclaimed benefits in June 2013. It stipulates that:

Prescription will not apply. In terms of prescription law, a debt does not have to be paid after three years and an unpaid benefit is a debt of a life assurance company to a policyholder. But the rules now exclude policies, which means that you can claim your benefits at any time after they fall due to you.

A life company may never take ownership of unclaimed assets. However, any money that remains unclaimed by the time the original policyholder is recorded as reaching the age of 100 may be invested in social-responsibility initiatives that offer a return on capital.

Annual reporting requirements. Life assurance companies have to report to Asisa once a year on statistics of tracing activities and cases that have not been settled within three years. These statistics are made available to the Financial Services Board (FSB).

“We endeavour to make payment to the rightful claimants the money that they or their loved ones worked so hard to earn.

“We believe that it is during uncertain times like these that such a pay-out could potentially change someone’s financial reality, and in turn make their journey towards financial freedom a little smoother,” says Van der Merwe.

Who qualifies?

You may qualify if you were employed, contributed to a retirement fund and did not claim or receive your benefit when you resigned or left the employer.

You may also have a claim if you were listed as a beneficiary of a former member who has not claimed or received their money.

“A sizeable portion of Liberty’s former fund members live in remote rural areas, so finding them can be difficult,” says Van der Merwe.

Many others were registered with their pension funds using incorrect or incomplete details, such as a date of birth instead of the full ID number or passport number, making recipients even harder to find. While the agents on the tracing team are slowly managing to track down these people, there are ways that you can help speed up the process.

Fedgroup uses a tiered approach to track and trace beneficiaries, using the most cost-effective method first. The process starts with electronic tracing and evolves to more expensive, resource-intensive physical tracing processes.

Fedgroup reports that it has been able to trace about 33% of people in the first phase, with an additional 33% found in the second phase, and the remaining 33% found in the third and final phase.

Check if you have unclaimed benefits

There are several ways to find out if you have an unclaimed benefit due:

  • Visit the FSCA website at fsca.co.za. It has a built-in search engine you can use to check if you are owed any benefits.
  • Contact or visit the websites of the larger life assurer companies to check if there are any benefits due to you.
  • Check the Liberty website www.liberty.co.za or call 011 558 2999.
  • Check the Old Mutual website www.oldmutual.co.za or call 0860 455 455 or 0860 33 77 77.
  • Check the Sanlam website www.sanlam.co.za or call 021 947 2263.
  • Check the Fedgroup website www.fedgroup.co.za.

How to claim your benefits

Once you’ve confirmed that you have unclaimed money, you will be required to provide a completed claim form from the relevant financial services company.

You will need to provide your tax information, proof of your identity (SA ID/passport copy or a valid driver’s licence) and any other relevant supporting documentation that will be stated on the claim form.

During the tracing process, you will have to answer security verification questions to ensure that you are a bona fide beneficiary.

This information will then be checked against the company’s internal records.

If all is correct, a confirmation will be sent to you as well as further information on the claims process. DM168

This story first appeared in our weekly Daily Maverick 168 newspaper which is available for R25 at Pick n Pay, Exclusive Books and airport bookstores. For your nearest stockist, please click here.

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