bout R20 billion in pension fund assets remains unclaimed by an estimated 3.5 million pension fund members or their beneficiaries.
This is according to the Financial Services Board (FSB), which held a round table discussion this week to address the issue of these unclaimed benefits.
The aggregate amounts of these benefits have built up over time as a result of the difficulties funds have experienced in identifying and contacting those entitled to them, as well as the difficulties members experience in claiming. This is particularly relevant if members have left the area in which the fund’s offices are located or left the country altogether after their employment ended. Not being able to pay the statutory allocations of surpluses to former members with whom funds have lost contact, and ignorance on the part of members or the dependants of deceased members about their rights to benefits, are also problems.
According to Rosemary Hunter, the FSB’s deputy registrar of pension funds, the main challenges in finding members are poor fund records relating to benefits and out-of-date contact information.
Migrant workers who return to their home countries after leaving employment struggle to claim and receive payment of their benefits in those countries, which is possibly why the mining industry’s funds make up such a large proportion of the unclaimed benefits, with an estimated R5.2 billion owing to 200 000 members.
Hunter says many members are not aware that money is owed to them because, before 2007, when the registrar instructed funds to change their rules, the rules of many funds provided that benefits that remained unclaimed three years after they had accrued would lapse.
Furthermore, in 2003, the minister of finance issued a regulation in terms of the Pension Funds Act which said that the full face value of each unclaimed share of surplus allocated to a former member in terms of a statutory surplus distribution scheme had to be held in a special account unless, and until, it was paid.
Some individuals are also not aware that, from the mid-2000s, even if they were fired from their jobs, they can still claim from their pension fund, as it is separate from their remuneration or work contract.
Beware of intermediaries
“People also believe they need the services of a lawyer or intermediary to claim these benefits,” says Hunter, who adds that the FSB is concerned about unethical practices where intermediaries offer to locate unclaimed funds for a fee, sometimes up to 20% of the amount of the benefit received by the member. Some of these intermediaries simply send their client’s information to the FSB with a request that it find out if there are benefits due to them. This simple query can, however, be done by any member without incurring any costs.
There are also scams in which intermediaries claim that they can obtain a death benefit from a fund, even though the member is still alive. They charge the member a few hundred rands and then disappear.
Some funds have employed tracing agents and intermediaries to find members on their behalf, and to assist them with completing claim forms, but these intermediaries are paid by the fund, not the member. Therefore, treat those who want money to help you claim your benefits with caution.
Do you have unclaimed funds?
If you believe you may be the beneficiary of unclaimed funds, your first step is to contact your former employer, your pension fund or its administrator. If your employer no longer exists and you do not know the name of the pension fund, you can contact the FSB at email@example.com or 012 346 5915.
You will need to provide some form of proof of your employment, such as a payslip, indicating that you were a member of a fund in terms of your employment contract. This can be a challenge if many years have passed and you do not have any paperwork. In this case, the FSB may consider an affidavit where you stipulate detailed information about your employment.
Unfortunately, there are many cases where people have fraudulently tried to claim from funds they did not belong to, or where the fund already paid their benefits. So the funds have to be careful and cannot