Unclaimed benefits: How to find out if you have a share in R42bn pot
You may be entitled to share in the surplus if you are a beneficiary of a family member that previously belonged to a retirement fund
About 67% of beneficiaries who contacted the financial sector regulator about unclaimed benefits are set to receive more than R13.7-billion from the R42bn sitting unclaimed in retirement funds.
Corlia Buitendag, head of the retirement funds supervision department at the Financial Sector Conduct Authority (FSCA), says to date almost 343,000 inquiries have been received from members of the public about unclaimed benefits. Of these 231,041 possible matches to the value of more than R13.6bn were made to the regulator’s database.
The database contains information of all active funds which hold unclaimed benefits as well as funds that were cancelled and which transferred the benefits to separate unclaimed benefits retirement funds.
Apart from searching the database electronically via the FSCA’s website, you can use the FSCA’s call centre, send an SMS and email or ask for a call back to make an inquiry, Buitendag says.
A benefit is considered unclaimed if the benefit has not been paid to, or claimed by a fund member within 24 months from the date it was due to the member.
“Unclaimed benefits” is a widespread issue in the local retirement fund industry with around R42bn due to approximately 4.7 million former fund members and beneficiaries.
Benefits are unclaimed or unpaid for various reasons, for instance, members do not provide the fund with their own updated contact details and the details of their beneficiaries. Other reasons include poor record keeping by funds or administrators or simply because fund members are uninformed about their withdrawal benefits if they resign, are dismissed or retrenched and how to claim their benefits.
If you were a member of a pension fund you can ask any insurer to check if there is an unclaimed benefit due to you.Sue du Plessis of Momentum Employee Benefits
In addition, prior to 2001, many funds that had built up a surplus had to formulate a surplus apportionment scheme that sets out how it will be allocated and former members may be unaware that they are entitled to a portion of that surplus.
If you were a member of one or more pension or provident funds during your working career, you may be due for a windfall. You may also be entitled to share in the surplus if you are a beneficiary of a family member that previously belonged to a retirement fund and who left their fund without receiving their full benefits.
But, bear in mind that you must have belonged to a retirement fund that is regulated by the Pension Funds Act. Funds which do not fall under the PFA include the Government Employees Pension Fund (GEPF); any funds that were created for current and retired employees of Transnet and its predecessor, the South African Railways and Harbours; the Telkom Pension Fund and the Post Office Pension Fund.
Your first port of call to locating any unclaimed benefits that may be due to you should be the fund or its current administrator, says Buitendag.
Sue du Plessis, portfolio head of complaints resolution at Momentum Employee Benefits, says all insurers have an unclaimed benefits division and their contact details are available on the internet.
If you were a member of a pension fund you can ask any insurer to check if there is an unclaimed benefit due to you, she says.
Most funds also use reputable tracing agencies to trace you if you have an unclaimed benefit. The tracing agency will send you the claim documentation and once they have all your documents they will send it to the fund/administrator. The fund will deduct a nominal fee off the value as a tracing fee. The fee varies depending on the insurer.
If you don’t know the name and contact details of the fund or its past or current administrator, you may be able to obtain this information from the FSCA. While the FSCA may be able to help you with information about your retirement fund, you must claim the benefits from your former fund or its administrator.
Buitendag says if the fund that you or your family member belonged to no longer exists, the date when the fund was cancelled is very important.
The FSCA ruled that as of 2007 retirement funds under its jurisdiction which had unclaimed benefits remaining in a deregistered fund, had to transfer these benefits to an unclaimed benefit fund.
However, your benefits may be lost forever because prior to the FSCA stepping in to enforce rule changes regarding unclaimed benefits, many retirement funds had rules that a member’s right to the benefit would lapse if it was unclaimed for a period of more than three years.
Regulator warns of unscrupulous agents
The FSCA has warned that there are many agents who want to make money out of supposedly helping you, as a former retirement fund member and your beneficiaries, claim your benefits.
These unauthorised agents either take a percentage of the amount of the benefit that is paid out or they request a processing fee for establishing whether a person has a benefit, Corlia Buitendag, head of the retirement funds supervision department at the Financial Sector Conduct Authority (FSCA), says.
While it’s not illegal to help anyone trace their benefit, the FSCA has found that many unauthorised agents have no intention of assisting you or your beneficiaries. In other words, all they do is take the fee.
A pension or provident fund may contract with a company to trace former members or beneficiaries who have unclaimed benefits, but in such a case you will not be asked to pay any fees, although the fund may deduct a fee from the benefit.
This table, supplied by the FSCA, is designed to help you determine whether the person you’re dealing with has been authorised by the fund to find beneficiaries.