Cape Town - It is estimated that retirement funds owe at least 3.5 million people about R20bn in benefits that remain unclaimed, according to the deputy registrar of pension funds, Rosemary Hunter.
A recent review in the mining industry alone estimated that at least R5.2bn is owed to 200 000 people.
"The primary purpose of pension funds is to pay benefits to their members and they must, therefore, find ways to trace and pay these beneficiaries, both local and foreign," she said at a briefing at the Financial Services Board (FSB).
"Retirement funds must take all reasonable steps to trace and pay millions of their members and beneficiaries who remain untraced."
Hunter said funds should insist that employers supply them with up-to-date contact information, including ID and cellphone numbers. The funds must also consider the use of social media as a means for advertising unclaimed benefits or for tracing beneficiaries.
Hunter, however, warned potential beneficiaries against intermediaries who cahrge exorbitant fees for helping them claim their benefits.
It is important to establish if the intermediaries are authorised by the funds to perform this function – in which case it is the fund that must pay for the service, not the members.
The reasons for unclaimed pension money include the failure by many employers or funds to provide proper information to employees, such as informing them of their entitlement to a withdrawal benefit if they resign, are dismissed or retrenched from their employment and how to claim a benefit when it accrues.
Other reasons include poor administration coupled with a failure by the boards of retirement funds to monitor compliance by those administrators and the failure by many fund members to inform their dependents that, if they die in service, there may be benefits payable to those dependents.
The FSB said on Thursday it assists members or beneficiaries in trying to trace benefits or shares of allocated surpluses they believe to be due to them if provided with relevant and sufficient information.
It does this by liaising with the funds and their administrators and does not charge a fee for this service.