An "unclaimed" benefit, as defined by legislation, is a benefit that has not been paid to or claimed by a member within 24 months from the date it became due for payment or claiming. These benefits are due to members of a pension or provident fund, or a possible beneficiary of a member who belonged to such a fund and who did not claim their benefit when their employment ended."Unclaimed Benefits" is a widespread issue in the retirement fund industry across South Africa. Industry statistics currently place the value around R43bn with approximately 4.8 million unclaimed members.
Why do Unclaimed Benefits exist?
Unclaimed Benefits from pension funds exist for a number of reasons, from member and beneficiary details not being updated, to fund members not informing their dependents about these benefits.
- Fund members do not provide the fund with updated contact details for themselves and their beneficiaries.
- Employers do not provide funds/administrators with comprehensive details of members of the fund.
- Many employers and/or funds don't provide members with sufficient fund information, informing them of entitlement to withdraw benefits if they resign, are dismissed or retrenched from their employment, and how to claim a benefit when it accrues.
- Poor administration and record keeping by funds/administrators.
- Insufficient mechanisms to enable foreigners, leaving the country shortly after the expiry of their work permits, to claim their benefits from their home countries and get paid in those countries.
- Fund members do not inform their dependents that, if they die in service, there may be benefits payable by their funds and which institution to contact.
- Boards of funds do not take all reasonable steps to trace and pay those entitled to the Unclaimed Benefits.
Liberty Corporate's Unclaimed Benefits
Liberty Corporate currently has approximately 100,000 members and R1bn in assets within its Unclaimed Benefit Fund. The Unclaimed Benefit Fund is a Liberty sponsored fund into which unclaimed benefits from occupational funds can be transferred.
- The Liberty Corporate Unclaimed Benefits Pension and Provident Preservation Funds are Liberty sponsored funds into which Unclaimed Benefits from occupational funds can be transferred. Their purpose is to receive, trace and pay the Unclaimed Benefits of members that have been transferred into the fund.
- Unclaimed Benefits exist in both the Unclaimed Benefit Fund, and other administered occupational standalone and umbrella funds.
- Liberty Corporate currently has approximately 100k members and R1bn in assets within its Unclaimed Benefit Fund. The Liberty Unclaimed Benefit Fund is managed by a board of trustees of whom 75% are independent.
- To search for an unclaimed pension benefit at Liberty, click here.
- To find out more about unclaimed pension benefits or how to claim, click here.
- To view the 2019 Unclaimed Benefits Trustee Report click here
What is Liberty doing to address the issue of Unclaimed Benefits?
Liberty is working with trustees of administered occupational funds to improve their Unclaimed Benefit outcome for both existing claims as well as the prevention of future Unclaimed Benefits.
- Liberty has significantly increased its claim payment capability from 300 claims a day to over 5000. However, tracing success rates have slowed as the majority of members of the Unclaimed Benefit Fund have been processed through traditional tracing methods.
- The enhancement of member data is now a key focus to enable more effective tracing. Liberty is piloting new innovative ways to enhance member data to allow the successful tracing of additional members.
- All Liberty Unclaimed Benefit members have been loaded onto the Financial Sector Conduct Authority (FSCA) database to enhance the FSCA's industry tracing mechanism.
- Liberty will continue to participate in the FSCA community initiatives, Money Smart Weeks, providing on the ground unclaimed benefit search capability within communities.
Liberty recently enhanced the governance of its Unclaimed Benefit Funds with the appointment Eva Kekana as an independent trustee. The Board of Trustees of the Unclaimed Benefits Funds consists of 75% independent trustees. The Independent Trustees are:
- Eva Kekana – Ms. Kekana previously served on the Board of Trustees of the Mineworkers Pension Fund, and the Sentinel Retirement Fund, and is currently also a Board member of the Liberty Corporate Select Umbrella Pension and Provident Funds.
- Jerry Mnisi - Mr. Mnisi was Head of Institutional Distribution at STANLIB Asset Management and a director of STANLIB Swaziland, Namibia, Lesotho and Botswana until 2016. He also served on the Board of SAMRO, where he was a member of the Remuneration Committee and Chairman of the Audit & Risk Committee.
- Douglas Maila - Mr. Maila is a well-known and respected former unionist and served as trustee of the Kimberly Clark Provident Fund for 15 years.
- During 2018 and 2020, the Liberty Unclaimed Benefits Funds traced and paid benefits to more than 32 000 members amounting to more than R380 million. We continue to work hard to reduce the occurrence of unclaimed benefits through improved member and employer education and investment in our tracing and payment processes.
Fund Deregistration Project
Over the course of 2007-2013, the South African pension fund industry embarked on a wide scale project to deregister dormant retirement funds. These were mostly funds without boards of trustees in place. Over 4,600 retirement funds were deregistered across the industry (the Deregistration Project).
Liberty's Fund Deregistration Background
Over the past 30 years Liberty has acquired a number of employee benefits businesses, which have included a large number of legacy funds that required administrative clean up. Liberty's historic records reflect that over this period it has deregistered approximately 9400 retirement funds, 4600 of these were deregistered during the Deregistration Project.
Funds Requiring Re-instatement.
Since 2014, Liberty has embarked on a comprehensive audit of its systems and historic records to identify any funds that may have been deregistered in error. Due to the complex history of acquisitions and migrations of systems and data across multiple administration books, certain asset records were delinked from the administration records. This resulted in certain funds being deregistered in error by Liberty and some of the previous administrators. Liberty has identified 130 such funds, of which approximately a quarter were deregistered prior to the Deregistration project, many by previous administrators. Liberty has successfully applied to the High Court for the re-instatement of 25 of these funds and has submitted a second application for the re-instatement of a further 10 funds. A supplementary founding affidavit has also been submitted for the reinstatement of an additional 13 funds. Liberty is in the process of preparing the remaining funds for their re-instatement via the High Court.
View the list of funds included in the first re-instatement affidavit here.
View the 2nd re-instatement affidavit submitted to the High Court here.
View the Notice of Set Down relating to the 2nd re-instatement application here.
View the Supplementary Founding Affidavit here.
- As public awareness of Unclaimed Benefit rises, nuance is needed
- Appointment of a new independent Trustee
- Trade Union Unclaimed Benefits
- Liberty and FSCA partner to educate
- Liberty reinstated 90 funds worth R82m
- Highest court to rule on FSB vs Hunter dispute
- ConCourt to rule on FSB pension billions
- Liberty trying to trace members of funds closed in error
Things you should know
A list of previous employers that have Unclaimed Benefits with Liberty
FSCA Search Engine
Search for benefits on the FSCA website