"Unclaimed benefits" generally refer to funds owed but not yet claimed by individuals. A major issue is the absence of a standardized definition across financial sectors, leading to uncertainty about the true scale of unclaimed benefits. This ambiguity affects the accuracy of reports to the Financial Sector Conduct Authority (FSCA).

 

In terms of the South African Pensions Funds Act, "unclaimed benefits" are well-defined: benefits that remain unpaid or unclaimed two years after a member leaves a fund. This sector has the most precise definition and so reports to the FSCA are the most accurate.

 

However, other sectors are less defined. Associations like the Association for Savings and Investments South Africa (ASISA) and the Banking Association of South Africa (BASA) are making strides in standardization. ASISA has issued guidelines on trigger events for identifying unclaimed funds, while BASA encourages members to identify dormant accounts and educate customers about them.

 

The last reported total of unclaimed benefits was R88.5 billion, but this number may be bigger or smaller, depending on the “unclaimed benefits” definition. Retirement funds account for R48 billion of this, which can be regarded as more accurate given its clearer statutory definitions.

 

This discussion is based on insights from the FSCA discussion paper “A framework for unclaimed financial assets in south Africa”.

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Read the discussion paper here.