Unclaimed Benefits
As a specialist South African financial services group,
we’re in the business of paying benefits.
Paying those who need it most
Unclaimed benefits are defined as those not paid by a fund to a member, former member, or beneficiary within 24 months of the date on which it became legally due and payable.
As legislation within the Pension Funds Act and Revenue Laws Amendment Act dictates that funds cannot remain in an active provident fund indefinitely, unclaimed benefits have to be transferred into an unclaimed benefit fund. These funds are therefore established to receive and administer these unclaimed benefits, which originate from various retirement funds where members or beneficiaries have not claimed the benefits that are due to them.
The main purpose of unclaimed benefit funds is therefore to provide a vehicle to safeguard benefits and to trace members or beneficiaries in an effective and efficient manner, ensuring that the funds get to those for whom they were intended.
The funds are governed by their own rules, which are registered with the Financial Sector Conduct Authority and are approved
by the South African Revenue Service.
Benefits
Reduced costs in tracing beneficiaries
Greater efficiency in tracking.
A proactive approach
Fedgroup uses a proactive tiered approach to actively track and trace beneficiaries, using the most cost-effective method first.
This beneficiary tracking process evolves from electronic tracing to more involved, resource-intensive physical tracing processes, which are more expensive.
With this approach, Fedgroup is able to trace approximately 33% of people in the first phase, with an additional 33% generally found in the second phase, with the remaining 33% generally found in the third and final phase.
A distinctive offering
The singular purpose of unclaimed benefit funds is to find the members or beneficiaries and pay out the benefit, while limiting the associated costs in the process. As such, Fedgroup’s industry-leading Unclaimed Benefits aims to:
Protect and preserve the benefits of our members
Provide a competitive rate of real return to minimise the effect of inflation, and maximise a member’s benefits, taking into account appropriate and acceptable risk levels, taxation and costs.
Ensure that fund assets are available.
Comply with all aspects of regulation.
Ensure that benefits reach those for whom they were intended.
Accordingly, the trustees of Fedgroup Unclaimed Benefits have invested in a linked investment policy through Fedgroup Life.
The funds are invested in the Fedgroup Beneficiary Portfolio, which seeks to preserve capital while targeting real growth at a benchmark of CPI plus 3% over a rolling three-year period. Investments are expertly balanced between equity, debt, immovable property and cash.