About R15 billion in benefits is lying unclaimed in South African retirement funds overseen by the Financial Services Board (FSB) and at least a third of the money may belong to former mine workers, according to reports.
In 2012 there were about 3.3-million unclaimed benefits with an aggregate value of about R15bn in retirement funds.
The FSB last week said that tracing former mineworkers has been particularly problematic, reported iAfrica.com
“We have a huge problem with unclaimed benefits in this country, with pension funds generally. It’s particularly bad in the mining sector,” confirms FSB board deputy executive officer for retirement funds and friendly societies Rosemary Hunter.
The FSB, which oversees more than 5 000 retirement funds, is putting pressure on the trustees of the funds and stepping up joint efforts with the Treasury to find solutions, said Hunter.
R5 billion unclaimed in mining sector
Personnel firm Teba, which assists mines in recruiting labour and provides services to the sector, puts the size of unclaimed benefits in a number of funds at R5 billion.
About 200 000 former mine workers or their dependants have to be found to receive these funds, said Teba MD Graham Herbert.
“That number is getting worse. More and more mine workers are owed money. The current system of tracing and paying mine workers is not working,” he said.
Teba, which has a database of 1.3-million mine workers, former workers and their dependants, is anxious to secure a role for itself in tracing and securing payments for the beneficiaries of these funds, said Herbert.
Shift in labour dynamics
Teba, which is more than a century old, used to secure labour from rural SA and neighbouring countries mainly for gold and platinum mines, but there has been a dramatic shift in the labour dynamics on mines.
More than 80% of labour is now drawn from communities around the mines and 20% from distant areas, reducing the need for Teba’s services.
Tracing agents appointed
According to iAfrica, a senior mining source, who asked not to be named, said one of the mining funds had put out a tender for tracing agents to resolve their backlog and has appointed five companies to do so from early this year. Teba was one of the agencies.
“Teba is not the best tracing agent despite all that data and information they say they have to trace people,” said the source. “They have had their costs negotiated down because they were too expensive and not as effective as the others.”
Efforts at some of the funds is progressing well, with the 1970s Fund having traced about 10 000 people so far this year and paid out R30 million of about R660 million outstanding to beneficiaries.