The Financial Sector Conduct Authority (FSCA) has pointed to R88.56 billion in unclaimed assets across the financial sector – with the majority being retirement funds.
According to the FSCA, based on currently available data, unclaimed retirement benefits constitute 53% of the total estimated unclaimed asset value, followed by the collective investment scheme and life insurance industry, which holds 38% of unclaimed assets.
Unathi Kamlana, the commissioner of the FSCA, said the authority’s most significant proposal to tackle the issue of unclaimed assets is the establishment of a Single Central Unclaimed Assets Fund.
Under this fund, all unclaimed assets, once identified as such, would be transferred and managed on behalf of the financial sector.
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“The main objectives of such a central fund will be to accept and manage unclaimed assets, prioritise the reunification of those assets with their beneficial owners, pay valid claims and distribute funds that are not reserved for valid claims for the benefit of positive impact,” reported the FSCA.
Alternatively, such unclaimed assets can be transferred to the National Revenue Fund for the same purpose.
The FSCA proposed 12 further recommendations in support of a ‘holistic and consistent approach to the treatment of lost accounts and unclaimed assets’.
Kamlana said that work is continuing to establish the true value of unclaimed assets in the sector, given that these assets are held by various financial institutions and not only by retirement funds.
He said one big hindrance to disbursing these funds is the lack of a common understanding of what constitutes dormant or unclaimed assets and the lack of reliable data.
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“We recognise that good progress has been made, but as the FSCA, we remain concerned because ultimately, we have to consider whether the customers and beneficiaries, in this case, are being treated fairly. It is quite clear that we have to improve the outcomes for customers, and that’s what this paper is trying to achieve,” said the commissioner.
The unclaimed assets include:
- Retirement fund benefits;
- Bank deposits, including foreign currency deposits;
- Participatory interests in collective investment schemes;
- Life and Non-Life Insurance policies;
The FSCA has been considering international frameworks for dealing with unclaimed assets to determine applicable definitions, management and reporting.
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The most common reasons for the presence of unclaimed assets, according to the FSCA, are:
- Asset owners’ failure to:
- keep financial institutions updated with their contact details and the personal details of their beneficiaries; and
- inform their beneficiaries of the existence of the assets and the institutions where it is held.
- Inadequate record keeping by financial institutions and intermediaries in the value chain.
- Inconsistency in approach to the identification and treatment of unclaimed assets (including reunification efforts) both within market segments and across the financial sector overall.
- Failure by employers to provide retirement funds/administrators with complete details of the members of the fund.
- Changes in intermediaries and administrators.
The FSCA said that despite an increase in the value of unclaimed benefits, it had seen a decline in the number of members who are entitled to the claims. This is primarily due to tracing efforts by occupational funds.
How to search if you are a beneficiary
On the FSCA website, the registrar of pension funds offers a single database to help members of the public determine through a search engine if there are owed any money.
The process requires basic information, including name, surname, identification number, fund name, and name of employer, into the unclaimed benefits search engine.
The FSCA said that it might only offer assistance by giving the appropriate fund’s and/or administrator’s contact information. Thereafter, an enquirer must get in touch with the fund directly and follow the fund’s standard claims procedure to demonstrate a legitimate claim.
Alternatively, the following search channels can be used to search for unclaimed benefits:
|Search channel contact||Contact details online|
|Online searches – FSCA website||Click here to search for unclaimed benefits…|
|Email enquiry – ID number||[email protected]|
|Email enquiry – general request||[email protected]|
|SMS enquiry – ID number||30913|
|SMS enquiry – general request||30766|
|Fax submissions||086 578 1183|
|Toll-free telephone enquiries||0800 20 3722 (toll-free)|
|Walk-in clients||River Walk Office Park, Block B, 41 Matroosberg Road, Ashlea Gardens|
|Written enquiries||PO Box 35655 Menlo Park Pretoria 0102|
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