Unclaimed Benefits refer to any monies due to a person that remain unpaid or unclaimed when a person resign, is dismissed or retrenched.
Unpaid retirement fund monies are defined in terms of the South African Pensions Funds Act as unclaimed benefits 2 years after a member leaves a fund due to resignation or retrenchment. The FSB has estimated that over R20 billion is due to more than 3 million individuals.
- It is hard to comprehend how a person would not claim their money, but this happens every day. Through a combination of employee financial illiteracy along with administrative issues at pension funds, their administrators and employers, the extent of unclaimed benefits residing in pension funds continues to grow. Even if you previously were paid when you left a fund due to resignation or retrenchment, there exists a very real chance you may be owed additional monies for a number of reasons. This will cover all funds that you may have been a member of since January 1980!
- The reason for members not receiving benefits due is that the fund administrators have no or invalid contact details on their records. People move on average every 4 years, they change cellphone numbers every 2 years, members emigrate and, unfortunately pass away before unpaid benefits can be paid. Unlike certain debts due, unpaid pension benefits do NOT prescribe (lapse) if not paid within a certain period with the benefit becoming due to their next of kin. In addition, elderly people and individuals living in rural areas do not necessarily have formal telephone numbers and addresses. Those who have emigrated or tend to be very mobile, making for contact ability problems. The service also enables children and relatives to assist elderly family members in receiving benefits due to them by registering their details.
- Even if monies were claimed and paid when you resigned, dismissed or were retrenched, it does not mean you received all benefits due to you. Errors in actuarial calculations or invalid fund rules may have resulted in an underpayment being made.
- Unclaimed benefits are not lost if a person dies as the benefit is payable to their beneficiaries.