South Africans Could Unlock R88.56 Billion in Unclaimed Assets

In a remarkable revelation, the Financial Sector Conduct Authority (FSCA) of South Africa has disclosed that an enormous sum of R88.56 billion in unclaimed assets is awaiting rightful claimants. This staggering amount encompasses resources that, for reasons such as oversight or lack of awareness, have yet to reach the hands of their legal owners.

The FSCA has been systematically addressing the challenge poised by these dormant funds, with a strong emphasis on those originating from retirement funds, which compose approximately 53% of the unclaimed assets. These funds could be life-changing for countless South Africans.

In order to expedite the disbursal of these assets, the FSCA issued a discussion paper in 2022 seeking pragmatic solutions. FSCA Commissioner Unathi Kamlana emphasized that clarifying the definitions of dormant funds is crucial in unraveling the complexity associated with the disbursal of these resources.

Moreover, the FSCA has floated the concept of a Single Central Unclaimed Assets Fund to streamline the management and allocation of unclaimed accounts. Proposed to be the custodian of such assets, this fund would democratize the process, allowing for increased transparency and efficiency.

Notably, the unclaimed assets landscape extends beyond retirement funds, including unclaimed dividends, bank deposits, interests in collective investment schemes, insurance policies, and securities. The life insurance sector and collective investment schemes alone contribute a massive 38% to the total pool.

The FSCA Deputy Commissioner, Katherine Gibson, provided insights into the sectors most affected by unclaimed assets, citing the occupational funds within the mining, motor, metal, and engineering industries as the most significant. Additionally, the Johannesburg Stock Exchange (JSE) has taken cognizance of this national concern by initiating a project targeted at reconciling unclaimed assets totaling R4.5 billion.

The JSE's subsidiary, JSE Investor Services (JIS), is on the forefront of implementing this drive. Over the past half-decade, JIS has succeeded in delivering R408 million to rightful claimants through its tracing services.

This initiative also encompasses a vital shareholder education component, equipping the public with practical knowledge on dividend functionality. Furthermore, it delves into the reasons behind unclaimed shares and delineates the process for individuals to ascertain potential claims.

Vuyo Lee, the JSE's Director of Marketing and Corporate Affairs, underscored the importance of collective participation from businesses and financial entities in this initiative's success. The JSE has already galvanized support from leading issuaries for this endeavor.

Considering the gravity of the situation, where roughly 4.8 million retirement fund members have yet to claim about R43 billion, the necessity of reaching out to financial service providers has been emphasized. However, the FSCA has offered an alternative to this seemingly daunting task by providing a dedicated search engine on its website.

This digital resource enables individuals to conduct self-service searches using personal details and fund information. Positive matches result in the provision of pertinent contacts to the relevant fund or administrator, facilitating the reclamation of these funds.