Unclaimed benefits sitting in retirement funds have probably swelled to R20-billion‚ the Financial Services Board (FSB) reported on Wednesday.The R20-billion is an estimate and the amount will be confirmed once retirement funds submit their financial statements for last year to the FSB.
By the end of 2013‚ R15.8-billion was owed to at least 3.07-million people. Of this‚ an estimated R5.2-billion was owed to mineworkers’ beneficiaries.
Public sector retirement funds have been excluded as they are not regulated by the board.
Rosemary Hunter‚ the FSB’s deputy executive officer responsible for retirement funds‚ said pension funds or their administrators did not maintain valid or complete member records‚ making it difficult for beneficiaries to claim their due.
There was also a communication breakdown and many beneficiaries were often unaware that they were entitled to a lump sum or pension payout when their relatives died.
She said there had been cases where pension funds were not at fault – some employers were reluctant to provide funds with sufficient information; while former members were deliberately not claiming‚ either believing the benefit too small or seeking to avoid paying tax.
Desperate beneficiaries have also been taken in by middlemen who have promised to help them claim their benefits in return for a cut of the takings‚ as well as an upfront payment.
“We have found that these individuals are charging up to 25% of the member’s benefit for their services‚ but this is based on the instances that we are aware of‚” the FSB’s pension surveillance and enforcement manager, Takalani Lukhaimane said.
Some pension funds do employ intermediaries‚ who are registered and are paid from deductions from a member’s benefit or cash set aside by the pension fund to trace members.
Payment is made only once beneficiaries have been traced and have received their benefits.
In contrast‚ the unofficial “tracers” ask for payment upfront from beneficiaries.
Then‚ once payment has been made‚ they deduct a percentage‚ getting paid twice‚ she said.
Lukhaimane also said unofficial tracers often did not have evidence that a potential beneficiary was in line for a payment‚ whereas those contracted by the funds would have some details‚ “precisely because there is a benefit payable and the fund wishes to trace and pay the benefit”.
To trace beneficiaries‚ pension funds could try contacting employers of the beneficiaries‚ and insist that employers supply up-to-date information such as identity numbers and cellphone numbers.
Funds could also use social media to advertise their unclaimed benefits or to trace beneficiaries.
Individuals who believed they should be receiving benefits can also approach the FSB for assistance free of charge.
Lukhaimane said the board would need some kind of information identifying the fund or the employer‚ such as a payslip. Then the FSB would contact the fund or administrator to check whether there was a benefit available.
“If you’re not on the database‚ we will try to corroborate your employment history‚ and based on that‚ we will calculate the benefit due to you‚” she said.
Unclaimed benefits over R20bn
By the end of 2013‚ R15.8-billion was owed to at least 3.07-million people. Of this‚ an estimated R5.2-billion was owed to mineworkers’ beneficiaries.
Public sector retirement funds have been excluded as they are not regulated by the board.
Rosemary Hunter‚ the FSB’s deputy executive officer responsible for retirement funds‚ said pension funds or their administrators did not maintain valid or complete member records‚ making it difficult for beneficiaries to claim their due.
There was also a communication breakdown and many beneficiaries were often unaware that they were entitled to a lump sum or pension payout when their relatives died.
She said there had been cases where pension funds were not at fault – some employers were reluctant to provide funds with sufficient information; while former members were deliberately not claiming‚ either believing the benefit too small or seeking to avoid paying tax.
Desperate beneficiaries have also been taken in by middlemen who have promised to help them claim their benefits in return for a cut of the takings‚ as well as an upfront payment.
“We have found that these individuals are charging up to 25% of the member’s benefit for their services‚ but this is based on the instances that we are aware of‚” the FSB’s pension surveillance and enforcement manager, Takalani Lukhaimane said.
Some pension funds do employ intermediaries‚ who are registered and are paid from deductions from a member’s benefit or cash set aside by the pension fund to trace members.
Payment is made only once beneficiaries have been traced and have received their benefits.
In contrast‚ the unofficial “tracers” ask for payment upfront from beneficiaries.
Then‚ once payment has been made‚ they deduct a percentage‚ getting paid twice‚ she said.
Lukhaimane also said unofficial tracers often did not have evidence that a potential beneficiary was in line for a payment‚ whereas those contracted by the funds would have some details‚ “precisely because there is a benefit payable and the fund wishes to trace and pay the benefit”.
To trace beneficiaries‚ pension funds could try contacting employers of the beneficiaries‚ and insist that employers supply up-to-date information such as identity numbers and cellphone numbers.
Funds could also use social media to advertise their unclaimed benefits or to trace beneficiaries.
Individuals who believed they should be receiving benefits can also approach the FSB for assistance free of charge.
Lukhaimane said the board would need some kind of information identifying the fund or the employer‚ such as a payslip. Then the FSB would contact the fund or administrator to check whether there was a benefit available.
“If you’re not on the database‚ we will try to corroborate your employment history‚ and based on that‚ we will calculate the benefit due to you‚” she said.
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