Unclaimed pension and provident fund benefits
31 July 2021 | SR Mokhele
Pension and provident Fund are forms of retirement funding. Their main objective is to save money in order to provide a secure and comfortable lifestyle at retirement stage.
Pension and Provident Fund are set up by an employer for the benefit of its employees. The objective is to provide pension and provident fund benefits to the members (employees) upon their retirement. A pension and provident funds may also provide other benefits such as death and disability benefits.
When the payment of benefits is due (at retirement stage), up to one third of the value of the fund benefits may be taken in cash. The balance of two third is taken as a regular monthly pension.
According to the Pension Fund Act, an unclaimed benefit is any lump sum or pension benefit or interest that is due to a retirement fund member (or his/her beneficiary) that has remained unclaimed for a period of time (two years after a member exit the fund but the benefit is unpaid or unclaimed).
Why do benefits may become unclaimed?
- Upon a member’s death, the trustees of the provident or pension fund will need to know who the dependents and beneficiaries of the member are. This information will assist them with the decision on allocating the available fund death benefits as fairly as possible.
- It is very important that a member ensure that his/her nomination form contains their latest family information.
- Without a nomination form or updated beneficiary nomination form, the trustees may not be in a position to identity all the members’ dependents.
The pension and provident fund benefits falls outside the provisions of a members’ Will and must be paid directly to their dependents. If a member does not have dependents, benefits will be paid to their nominated beneficiaries. The Trustees of a retirement fund will look at the nomination list when a member dies to decide who to consider as dependents and potential beneficiaries of the members pension benefits.
How do I find my unclaimed pension benefits?
The Registrar of Pension Funds provides a central database on the Financial Service Conduct Authority (FSCA) website to assist members of the public to ascertain through the search engine if there are any unclaimed benefits due to them.
An enquirer will be required to input basic information into the Unclaimed Benefits Search Engine, i.e., name, surname, identification number, fund name, name of employer, etc. in order for the search engine to check if there is a possible match. On a successful match, the enquirer will be provided with the contact details of the fund and/or administrator.
In conclusion, if you were a member of a retirement fund in South Africa, even as far back as 1981, you may still be entitled to a benefit that hasn’t been paid out because your former fund is unable to contact you. If the fund’s rules provide that you, the member, can claim this amount, the fund can pay these unclaimed benefits into a pension or provident fund, and the member or his or her beneficiaries can claim the unclaimed benefit.
Retirement fund benefits cannot be forfeited. Benefits that cannot be paid are regarded as “unclaimed benefits.”
Complete and update your beneficiary nomination today!