There is R44.9 billion worth of unclaimed pension funds in South Africa owed to 4.5 million people, according to the Financial Sector Conduct Authority.
Over R20 billion was paid to more than 500,000 beneficiaries in the last five years, but the regulator believes that 40% of the unclaimed funds will not reach its owners.
The FSCA has introduced ways for the public to find out if they are owed any money.
Unclaimed pension funds in South Africa are in the billions as millions of rightful owners fail to claim for various reasons.
The total amount of unclaimed pension funds in the South African retirement industry is sitting at R44.9 billion since end of 2019, according to the Financial Sector Conduct Authority (FSCA).
This figure, which is likely to change as the FSCA awaits 2020 numbers, can be linked to some 4.5 million beneficiaries who have not claimed for reasons including migrant labour and failure of employers to provide fund administrators with complete details of the members of the fund, among other reasons.
In efforts to trace and pay the beneficiaries, more than R20 billion was paid to 598,000 members in the last five years, amounting to an average benefit of R36,978 per member.
Although this is the case, the FSCA thinks that about 40% of the unclaimed money will likely never be reunited with its rightful owners.
Recently, the regulator proposed that there be a centralised fund in which the money will be kept.
Why beneficiaries have not claimed for their benefits:
Failure by members to provide the fund with their updated contact details about themselves and their beneficiaries.
Failure by employers to provide funds/administrators with complete details of the members of the fund.
Many employers and/or funds do not provide members with sufficient fund information, such as informing them of their entitlement to a withdrawal benefit if they resign, are dismissed or retrenched from their employment, and how to claim a benefit when it accrues.
Poor administration/record keeping by funds/administrators which in some cases have since ceased to exist.
The requirement that foreign workers leave the country shortly after the expiry of their work permits and the lack of sufficient mechanisms to enable them to claim their benefits from their home countries and be paid in those countries.
Failure by fund members to inform their dependents that, if they die in service, there may be benefits payable by their funds to those dependents and which institution to contact.
Failure by boards of funds to take all reasonable steps to trace and pay those entitled to the unclaimed benefits.
Various other measures have been introduced to allow the public to find out if there is money owed to them.
Here’s how to find out:
Online searches – FSCA website
Email enquiry – ID number: Pensions.UBmemberID
Email enquiry – general request: Pensions.UBQuery
SMS enquiry – ID no: 30913
SMS enquiry – general request: 30766
Fax submissions: 086 578 1183
Toll-free Telephone enquiries: 0800 20 3722 (toll-free)
Walk in clients address: River Walk Office Park, Block B, 41 Matroosberg Road, Ashlea Gardens
Written enquiries: PO Box 35655 Menlo Park Pretoria 0102
"If it is determined through enquiries with the fund that there is a valid claim, the administrator will provide the member with claim forms that need to be completed to facilitate payment.
"This process takes place independently of the FSCA and is strictly between the member/beneficiary and the fund through its administrator," said Takalani Lukhaimane manager of conduct supervision at the FSCA.