Plan to give South Africans R88 billion in unclaimed benefits

South Africa’s financial regulator is working on a plan to ensure that billions of rand in unclaimed retirement, severance, and death benefits are distributed.

Financial Sector Conduct Authority Commissioner Unathi Kamlana said that R88 billion was owed to South Africans but had not been claimed.

“People are genuinely interested in getting this right because, in a country with an unemployment rate such as ours, anything that provides any kind of alleviation is acceptable,” Kamlana said in an interview with Bloomberg. 

South Africa has among the world’s highest unemployment and inequality rates.

The nation’s mining sector, which historically relied heavily on a low-income labor force, accounts for the largest chunk of unclaimed benefits, FSCA research shows.

“The sector was designed never to really look after the interests of the labourers, and therefore whatever would’ve been deducted, would’ve been deducted, I think, with the intention that the labourers would never get that money,” Kamlana said. 

The FSCA wants to make information more easily available and improve the process for lodging a benefit claim.

Some of the funds could also potentially be used to improve public services in poor areas. Other proposals include establishing a central unclaimed assets fund or transferring the money to the National Revenue Fund.

The FSCA plans to submit its proposals to the government.

“This is an old problem, but the unclaimed benefits increase each year, which means that not enough is done,” Kamlana said.