STORED information on retirement fund members is a major concern for the entire industry and is not limited to a particular type of fund or financial product, a retirement fund solutions provider said on Thursday.
On Wednesday, the Financial Services Board said unclaimed benefits for last year would rise to an estimated R20bn this year, partly because retirement funds or their administrators did not maintain valid or complete records. More than a quarter of this amount was owed to mine workers or their beneficiaries.
"The challenge is not so much the record-keeping but more the quality of the information stored," said Arno Loots, head of umbrella fund solutions at Liberty Corporate.
The mining industry has a number of pension funds, most of which have an umbrella structure, such as the Sentinel Mining Industry Retirement Fund and Mineworkers Provident Fund.
These funds manage retirement and other benefits on behalf of thousands of members from different employers, raising questions about whether the type of fund used contributed to the growing number of unclaimed benefits.
But Alexander Forbes Financial Services’ Francois van Aarde said the company, one of the largest retirement fund administrators in the country, had R1.2bn in unclaimed benefits held in funds specially created for them. These were owed to 189,662 beneficiaries.
"Most of the funds which are administered by Alexander Forbes have unclaimed benefits. We use a variety of tracing agencies and thus far have achieved progress in this regard."
Alexander Forbes continually subjects its data to updated tracing databases and providers, performing tracing exercises to the total portfolio of unclaimed benefits twice a year.
It has also embarked on campaigns for each fund to locate and pay beneficiaries, including community radio campaigns, help desks and walk-in centres.
The frequency of tracing exercises had also been increased and employers of former staff members were advised of unpaid benefits in case these staff members made contact.
Mr Loots said draft default regulations recently introduced by the Treasury would see quality information becoming key and accurate member information would increase.
"The industry has made significant progress to enhance administration and record-keeping over the last decade. In future, technology will play a critical role, both in keeping in touch with the member and updating details on a continuous basis," he said.