2017-04-24

Search for lost beneficiaries goes high-tech

A new approach by Metropolitan, using disruptive technology, may help to reduce the estimated R20 billion in unclaimed benefits from life assurance and investment policies that are due to as many as 3.5 million South Africans.
Deidre Wolmarans, the head of life events solutions at Metropolitan, says that most of this unclaimed money is in the form of residual benefits from lapsed policies, which policyholders are unaware of after they stop their monthly payments.

“Usually, a change of address is involved, and we cannot trace the beneficiary, or the policyholder has died and the next of kin are unaware of the existence of the policy,” Wolmarans says.
Industry regulations ensure that the financial product providers themselves can never take ownership either of the unclaimed benefits or of any interest accruing to them.

Metropolitan recently partnered with fintech company Colab, using its products FindBen and PayBen, to help trace beneficiaries.
“The primary motivation is simply to do the right thing by paying the money due to beneficiaries,” Wolmarans says, “and it’s a great positive to surprise and delight them with a completely unexpected pay-out.”
Wolmarans says the new proprietary model uses an unconventional tracing method that is set to disrupt the market and is already yielding a relatively higher success rate than traditional methods: “In just one exercise with Colab, we were able to find and pay out R20 million to 18 140 beneficiaries securely, quickly and more efficiently”.
Colab chief executive Will Green says he believes the model “has demonstrated that we can decrease a financial services provider’s liability, increase overall operational efficiencies and deliver additional goodwill to the provider and its clients”.
Wolmarans encourages anyone who suspects there might be an unclaimed benefit owing to them to get in touch with Metropolitan.

http://www.iol.co.za/personal-finance/search-for-lost-beneficiaries-goes-high-tech-8759230

2017-04-21

How to submit an enquiry for unclaimed retirement funds

Cape Town - The Financial Services Board is at the ready to provide support to claim billions of rands in outstanding benefits owing to former mineworkers.
Fin24 reported that there is R10bn of unclaimed former mineworkers' retirement benefits in various pension and provident funds, with some dating back to the 1970s.
"The Financial Services Board is providing support to provident and pension fund administrators to identify former mineworkers who need to receive the pension and provident funds due to them some dating back to the 1970s," the Presidency announced.
The FSB assists members or beneficiaries in trying to trace benefits or shares of allocated surpluses they believe to be due to them if provided with relevant and sufficient information.
A Fin24 user wanted to know the correct channels to follow to make a claim after unsuccessfully dealings with an administrator.
"My father and grandfather used to be mine employees on the mines in North West Klerksdorp area. We've been struggling endlessly to claim their surplus and never seem to get on top of it."
The user said the hassle with the last company who contacted the family was because of a shortage of documents that he said he wasn't sure even his father knew about.
"We don't come from a well-off background and after my father passed we were left in a minus so for my mother to receive any benefits due to my father would mean the world to her."
Fin24 contacted the FSB to find out what the process is.
"Before approaching the FSB, individuals who believe that they are entitled to unclaimed benefits should directly contact the respective retirement fund in order to establish whether they have any benefits attributable to them."
The details of the fund can be obtained from the member’s employer at the time.
If the enquirer wishes to complain about the non-payment of a benefit that was due and payable during the last three years, the Pension Fund Adjudicator should be approached for assistance.
Should individuals experience difficulties in contacting the retirement fund directly, they must submit an enquiry form together with certain supporting. Once the documents are received, the FSB will contact the fund with the enquiry and provide them with 30 days to respond to the query.
There is also a section of the form that can be completed by individuals to assist family and friends with lodging an enquiry with the FSB.

http://www.fin24.com/Money/Retirement/how-to-submit-an-enquiry-for-unclaimed-retirement-funds-20170420?utm_source=fin24-am-update&utm_medium=email&utm_campaign=Newslettershttp://www.fin24.com/Money/Retirement/how-to-submit-an-enquiry-for-unclaimed-retirement-funds-20170420?utm_source=fin24-am-update&utm_medium=email&utm_campaign=Newsletters

2017-04-10

Despite hurdles, pension fund trustees must treat members and beneficiaries fairly

Your retirement fund has a duty to you, as a member, to protect your retirement savings and to act in your best interests and those of your beneficiaries. Often, fund trustees must weigh up the interests of an individual against those of the members as a group. But sometimes they simply fail to uphold the standard of duty required, which can be as basic as helping a potential beneficiary with a claim.
Trustees’ duties are clearly spelled out in the Pension Funds Act: “The board shall take all reasonable steps to ensure that the interests of members… are protected at all times ... [The trustees must] act with due care, diligence and good faith; avoid conflicts of interest; act with impartiality in respect of all members and beneficiaries; act independently; [and they] have a fiduciary duty to members and beneficiaries in respect of accrued benefits or any amount accrued to provide a benefit, as well as a fiduciary duty to the fund, to ensure that the fund is financially sound and is responsibly managed and governed ...”


Trustees must ensure that “adequate and appropriate information is communicated to the members and beneficiaries of the fund, informing them of their rights, benefits and duties in terms of the rules of the fund”.
The Pension Funds Adjudicator, Muvhango Lukhaimane, has her hands full dealing with complaints from members and beneficiaries and, in many cases, she finds that funds and their administrators have fallen short of what is required by the law.

To be fair, the Act is onerous on trustees, whose job is far from easy, especially when dealing with death benefits. These must be distributed equitably among beneficiaries, with a deceased member’s dependants taking priority over nominated beneficiaries. This can be a nightmare when claimants start popping out of the woodwork, particularly if it is after the benefits have been distributed. If the claimants have valid claims in these cases, a fund is often unable, practically, to “redistribute” a benefit, and may be obliged to make an additional payment, which directly affects the interests of existing members.
A recent case, in which a claimant disputed a fund’s distribution of his father’s death benefit 13 years after the distribution was made, exemplifies the difficulties. The benefit, almost a quarter of a million rands, had been distributed after Mr M’s father’s death in December 2003, when Mr M was just six years old, and the distribution did not include him or his mother. The deceased had been an employee of the Ekurhuleni Metropolitan Municipality and a member of the Municipal Gratuity Fund (MGF) administered by Sanlam.
Mr M said it was only after he turned 18 that he attained “the legal capacity to challenge the decision” of the fund’s board back in 2003.
The MGF responded with a technical defence: the debt had prescribed. In other words, Mr M had waited too long to claim, and, according to the laws governing the prescription of debt, the claim was time-barred. However, it said, if this defence was dismissed by the adjudicator, and if there was a prima facie case that the complainant had been prejudiced, the board and the fund administrator would consider an ex gratia payment. According to the fund, the debt prescribed on November 10, 2016. Mr M filed his complaint just 12 days later, on November 22.
For reasons too technical to detail here, the adjudicator dismissed the MGF’s argument that the debt had prescribed. She was also particularly disapproving of how the MGF had dealt with Mr M’s claim. According to her determination: “[Mr M] stated that he is an indigent person who, together with his mother, had made several attempts to enquire about the distribution of the death benefit. However, [the MGF] sent them from pillar to post. [Mr M] avers that he went to the extent of approaching the Law Society, which led to him receiving legal assistance and lodging this complaint.
“The inescapable conclusion this tribunal arrives at is that had [the MGF] acted fairly and provided [Mr M] and his mother with adequate information with respect to the distribution of the death benefit and explained to them that if they were unhappy with the distribution they had recourse by approaching this tribunal, the complaint would not have been time-barred against [Mr M].”
Lukhaimane ordered the 2003 decision of the fund regarding the distribution of Mr M’s father’s death benefit to be set aside, and the fund’s trustees to re-evaluate the matter, taking into consideration the issues raised in her determination.

PRESCRIPTION AS A DEFENCE
In 2015, the Pension Funds Adjudicator, Muvhango Lukhaimane, made a plea to pension funds not to use the prescription of debt as a defence in cases where beneficiaries were claiming against funds, particularly where the benefits were unclaimed.
A  feature of the Prescription Act is that it takes effect only if it is successfully invoked as a defence for not paying a debt. In other words, a debt does not prescribe automatically.
Lukhaimane said her office had no jurisdiction over cases where a fund had legitimately cited prescription as a reason not to pay a benefit, and refers such cases to the FSB. But she said she had asked funds not to use this defence.
“In certain instances, pension fund consultants advise funds to respond on the technicality that the claim has prescribed, even though they are holding a benefit for a member or dependant. I raised this issue with the industry and have held meetings with administrators that have been advising funds to respond like this. Given the huge problem with unclaimed benefits, we encourage funds not to raise the technicality of prescription, so that we can do our bit to assist,” Lukhaimane said.

http://www.iol.co.za/personal-finance/despite-hurdles-pension-fund-trustees-must-treat-members-and-beneficiaries-fairly-8544332