Unclaimed Retirement Benefits: Part I
An estimated R45 billion is currently waiting to be claimed by approximately 4.5 million former fund members or their beneficiaries in South Africa.
Where is the Money?
The majority of these funds sit within 1,250 retirement funds regulated by the Financial Sector Conduct Authority (FSCA). However, this R45 billion also includes funds not supervised by the FSCA, such as:
- GEPF (Government Employees Pension Fund)
- SAPO (South African Post Office)
- Transnet & Telkom
Note: For these specific entities, members must contact administrators directly.
Key Concepts to Understand
A collective term for pension, provident, preservation, or retirement annuity funds—all designed as tax-efficient savings vehicles.
A Member is the person in whose name contributions are made. A Beneficiary is a dependent or nominee entitled to the benefit upon the member’s death.
Legally, a benefit is “unclaimed” if it hasn’t been paid within 24 months of the date it became payable (usually the date an employee leaves a job).
Types of Unclaimed Assets
Beyond standard pension payouts, “unclaimed benefits” include:
- Beneficiary Funds: Monies held for minor dependents or those unable to manage a lump sum.
- Matured Retirement Annuities: Policies that have reached their end date but remain unpaid.
- Surplus Distributions: “Agterskots” or extra allocations from fund surpluses.
- Preservation Funds: Monies transferred out of employer funds but never accessed by the individual.
The Law & Trustees
The Pension Funds Act (soon to be the Retirement Funds Act) governs these assets. Every fund is managed by a Board of Trustees who have a legal duty to act in your interest. The FSCA requires these trustees to exhaust all tracing efforts before moving funds into “unclaimed benefit preservation” accounts.
Coming Next: Why do these benefits exist and how do you find them?
Look out for Part II and III in the May and August editions.
Author: Carol Lenzi CFP®
