Aside from unclaimed funds in the pensions system, there are billions in unclaimed funds sitting in life insurance policies and collective investment schemes.In addition, the FSB does not regulate some state-linked pension funds, such as the Government Employees Pension Fund, the Transnet Retirement Fund and the Post Office Retirement Fund.The industry has not been pro-actively tracing individuals, particularly people who are hard to find, such as migrant workers from neighbouring countries.A secondary problem is that of “institutional mazes and bureaucracy”, which impedes beneficiaries when they try to claim the money owed to them, he said.But civil society campaigners argue that vested industry interests, such as large pension funds administrators, are not doing enough to trace beneficiaries and that the regulator is not adequately ensuring they pay claimants out.Moffat Chauke, of the Unpaid Benefits Campaign, said fund administrators do not do a good enough job of tracing beneficiaries.But, said Takalani Lukhaimane, the manager for pensions enforcement and surveillance, greater reporting and disclosure requirements from funds relating to unclaimed benefits and changes to how funds classify these assets have in part contributed to the increases.
And the problem of the misuse or duplication of ID numbers continues today in some sectors, she said, for example in the security industry“Because the funds don’t have accurate information, because of historic or current problem, it’s difficult for them to trace somebody,” she said.
The proposal was not realised, but this year the FSB has again proposed amendments to the Pension Fund Act to provide for a central fund.
This could be expanded to include the unclaimed money sitting in other industries, such as the insurance and banking sectors.
For about 26% of members, the amount owed is less than R250.
The FSB said these small amounts represent a very small portion of the total value of unclaimed benefits — about 0.6% and 2% respectively.