Probe country’s pension system

One of the biggest social problems facing South Africa is that when people retire, they don’t have enough to live on, which creates financial pressure both on the state and their families. At the same time, government and personal finance experts urge people to save for that proverbial rainy day.

So, it is shocking to hear that more than R51 billion in unclaimed pension benefits is lying in pension funds and investment houses.

A campaign to reclaim these benefits is being spearheaded by the Unclaimed Benefits Committee, representing a group of claimants, together with nonprofit organisation Open Secrets. The two organisations are planning to lobby parliament over the issue.

An investigation by Open Secrets revealed that more than four million South Africans are owed money from schemes which fall within and outside the ambit of the Pension Acts.

This is a sickening statistic in a country where 44% of pensioners live in poverty.

The reason is because the pension system is not thorough and accurate enough to cater for those workers who leave employment unaware of benefits that may be due to them.

Also, the reality is that pension fund administrators, whose supposed task is to track down possible claimants, don’t exactly spring to the task with alacrity because they charge fees for managing funds under their control, including those which are unclaimed.

What is worrying is that, according to Open Secrets, its damning report has not elicited a response from the Financial Services Conduct Authority, which is the regulatory body in charge of pension funds. It was previously known as the Financial Services Board.

This whole affair needs to be thoroughly investigated and those who are owed money should be tracked down and paid out.

More than that, however, a system which allows such abuse of financially vulnerable people must be drastically changed.