Everyone could use an unexpected windfall in the form of unclaimed money in South Africa. While this might sound unreal, there is a possibility that you could be one of millions of beneficiaries due a share of R42 billion in unclaimed pension fund money and life insurance policies in South Africa. There are currently more than 4.77 million untraced beneficiaries in South Africa, according to data from the Financial Sector Conduct Authority (FSCA).  Let that sink in for a minute. Before you get your hopes up too high, let’s take a look at what you need to know about unclaimed pension funds and insurance policies.

 

Unclaimed Money South Africa

 

What is an unclaimed pension benefit in South Africa?

According to the Pension Funds Act, an unclaimed benefit is any benefit that has not been paid to a beneficiary by a pension or provident fund within 24 months of the date that benefit becomes available or claimable. These benefits are due to members of a pension or provident fund or to their possible beneficiaries where, for example, the beneficiary did not claim their benefit when employment ended.

Responsible for monitoring the funds that are bound by the Pension Funds Act, the FSCA has noted that despite the fact that more than R22.93bn has already been paid out to 647,528 beneficiaries that were identified  between 2014 and 2018, there was still more than R42.83bn in unclaimed pension benefits in 2018. That number is likely to rise once 2019 data has been released after Covid-19 delays.  Furthermore, according to its 2019 annual report the Government Employee Pension Fund (GEPF) has an additional R1.73bn in unclaimed pension funds. That’s a lot of unclaimed money in South Africa.

 

How do I know if I am a beneficiary of an unclaimed pension benefit in South Africa?

Private retirement funds in South Africa are obliged to disclose all details to the FCSA relating to their unclaimed fund benefits, including amounts. This information is stored in the FSCA’s unclaimed benefits database, which you can access.

 

What is an unclaimed insurance policy in South Africa?

According to a Business Insider article from 2019, there is more than R17 billion in unclaimed or forgotten unit trusts and insurance policies in South Africa. How does this happen? When policyholders cease their policy payments, their policy providers (usually investment firms or insurance companies) convert their policies into accounts that are paid up and the funds then become due to the policyholder. However, most policyholders don’t know that they’re owed this money because they have no idea that their policy is now paid up – they (mistakenly) assume this money is lost to them.

 

Why is there so much unclaimed money in South Africa?

• The policyholder or pension/provident fund member dies without beneficiaries or the named beneficiaries are uncontactable or unaware of their unclaimed funds in South Africa.
• The policyholder or pension/provident fund member has forgotten about the existence of the money, either due to dementia or  because it happened so long ago.
• The policyholder or pension/provident fund member has moved abroad and is unaware of their unclaimed benefits back in South Africa.
• Beneficiaries are not easy to track and contact because people change jobs and residential location without updating their contact details with their insurance providers/investment companies.

Whatever the reasons may be, insurance and investment companies are compelled to search for beneficiaries for at least three years after these assets are considered unclaimed. Legally speaking, the funds in these policies cannot be paid out to anyone except the policyholder or beneficiary, irrespective of their current geographical location.

 

Isn’t there an easier way to find out if I am owed unclaimed insurance policies?

There is no central database for unclaimed insurance policies in South Africa, so you’d have to physically contact each insurance company (yes, all of them) if you think you might be owed any funds from a paid-up policy.

If this sounds too much like hard work, and you’re ready to give up on that dream of unclaimed money, don’t despair. FinGlobal can help you track and trace any unpaid insurance policies (and pension benefits) that you could be due. We work closely with all insurance providers in South Africa to bring beneficiaries and their unclaimed funds together. Once we’ve ascertained that you’re a beneficiary, we can then walk you through migrating these funds abroad, helping you navigate the tax and foreign exchange requirements. All you need to do is give us the go-ahead.

 

FinGlobal: we can help you track down unclaimed pension funds and insurance policies in South Africa

As cross-border financial specialists we’ve already helped thousands of South African expats in over 105 countries and now we’re ready to extend our full service offering to you:

• Retirement annuity withdrawal
• Financial emigration
• Tax clearance
• Tax refunds
• Tax emigration
• Foreign exchange
• Pension fund income

What are you waiting for? That unexpected windfall in the form of an unclaimed pension benefit or insurance policy isn’t going to find itself! Leave us your contact details and we’ll be in touch.