It’s hard to imagine that people may not know that money is due to them, sitting in some large institution’s computer or lodged in dusty files. Even worse, there are those who have actually forgotten the monies due to them.
Unclaimed benefits may be decades old. Each year the statistics add up to billions. In fact, the last Annual Report of the Registrar of Pension Funds (December 2018) stated that approximately R44 billion in unclaimed benefits is owed to around 4.4 million beneficiaries. It is estimated that unclaimed assets held in 147 221 products still need to be returned to the legal owners.
What are unclaimed benefits?
- An unclaimed benefit is a sum of money that is due to a retirement fund member (or beneficiaries) that has remained unclaimed for 24 months since the date it becomes legally payable. It seems that if beneficiaries are not traced within 24 months, there is only a 10% chance of finding them.
- Although companies do their best to trace people, it is important to remember that it is your responsibility as a fund member to ensure that the relevant financial institutions have your updated contact details and beneficiary nominations on record, in order to ensure that the rightful persons will be paid when the policies come due. It is bizarre to think that millions of people have not thought to investigate whether they have any pension monies due to them – amounts totalling billions are waiting to be claimed.
- Many of these long held accounts date back to the 1980s. Over time beneficiaries have changed addresses and, in some instances, have also never provided IDs or fixed places of abode with traceable addresses. And rather disturbingly, poor record keeping by the funds has also contributed to the number of unclaimed benefits.
- It’s also important to note that there are tracing agents that can find lost policies for you, but beware of anyone who charges for this service. These are rogue agents – a genuine tracing agent will never ask for fee. National Treasury announced in the 2020 Budget that legislation will be prepared to consolidate unclaimed benefits and establish a single registry.
Knowledge, preparedness and keeping track
However, when it comes to receiving life insurance benefits after a friend or relative has died, it seems that baby boomers are more prepared than millennials or Gen Zs because the latter remain unaware of the coverage or don’t possess basic information about the policies.
There is a need for policy holders to have better communication with their beneficiaries and to talk about money matters more openly, and to make such conversations more informationally intent. It’s important for individuals to know they are listed as beneficiaries on a policy. Specifically they need to know:
- when this was done
- the name of the insurance company
- where it was done (where the policy is stored)
- what is the benefit amount
- who to contact if necessary.
Many people may take out a life insurance policy and not inform the beneficiaries, perhaps assuming they are leaving a comforting surprise in the event of their death. However, this doesn’t always work out if the beneficiaries have moved, or perhaps even left the country and are untraceable for the life insurance company. Always keep your beneficiaries informed.
Likewise, make sure you remember pensions you have taken out during your working years, or company pensions which may not have been claimed or paid out when you left that company to join another. Sometimes people don’t realise that these amounts are legally yours, and may still be sitting in a stored account somewhere. This is when you need professional tracers to get to work on your behalf – and find what’s due to you.
Check your policies, check your life
Verifi is an online tool that provides you with an immediate and up-to-date overview of all your life insurance and investment policies by sourcing information from all the major life insurance companies – and presenting the information in a comprehensive report.
With Verifi you are able, for no charge, to access information on all your life and investment policies at a glance. You are able to check the types of policies you have, the names of the insurance companies providing the cover, the nature and extent of the insurance cover provided – and other vitally important information such as the details on your policies being correct.
To find out more, please visit: www.verifi.co.za