The Financial Services Board (FSB) is to press ahead with legislation to establish a special fund for the estimated R14 billion in unclaimed retirement fund benefits belonging to about 173 000 former members.
The R14 billion in benefits equates to an average of R8 092 a member.
The FSB is proceeding with the special fund despite widespread opposition to the move from retirement funds. Resistance to the move was voiced at this week's conference of the Institute of Retirement Funds.
Some delegates expressed the fear that the money would disappear into the new fund and become even less accessible to members.
The delegates drew comparisons between the unclaimed benefits fund and the Guardian's Fund, which is managed by the Master of the High Court, where hundreds of billions of rands that are owed to minors lie unclaimed, and little is being done to find the claimants.
Jurgen Boyd, the FSB's deputy executive in charge of pension funds, told the IRF that it intends to set up the fund soon.
Legislation to establish the unclaimed benefits fund, which will fall under the jurisdiction of trustees to be appointed by Finance Minister Trevor Manuel, is likely to be included in a planned omnibus amendment to the Pension Funds Act.
Boyd says that industry players have burdened the office of the Registrar of Pension Funds with requests to find a solution to the unclaimed benefits, while retirement fund administrators have been complaining about the cost of administration.
In the case of funds that consist exclusively of unclaimed benefits, the funds cannot be transferred, deregistered or liquidated, as they do not have a board of management to take any decisions or put a process in place to trace beneficiaries and make payments to them.
These funds are further required to pay levies, submit annual statements and tri-annual valuation reports, he says.
Boyd says the aim is to accumulate all unclaimed benefits into a central fund that will be tasked primarily with finding beneficiaries.
- If you suspect that you have unclaimed retirement fund benefits, go to the FSB website, www.fsb.co.za On the home page you will find a link called Unclaimed retirement fund benefits that will take you to a search facility. You will need the name of the fund member and the name of the retirement fund to do a search.