South Africa

R88.56 billion of unclaimed assets in South Africa

The Financial Sector Conduct Authority (FSCA) is trying to resolve the problem of R88.56 billion in unclaimed assets across the financial sector – with the majority being in retirement funds.

It produced a discussion paper to find a solution that will lead to increased disbursements of unclaimed assets to beneficial owners.

FSCA Commissioner Unathi Kamlana said that a significant hindrance to disbursing these funds is the lack of a shared understanding of what constitutes dormant or unclaimed assets.

To tackle the issue of unclaimed assets, the authority considered international frameworks to determine the definitions, management and reporting of unclaimed assets.

Its most significant proposal is the establishment of a Single Central Unclaimed Assets Fund, where all unclaimed assets would be transferred and managed on behalf of the financial sector.

Breakdown of the unclaimed assets

According to the FSCA, based on currently available data, the unclaimed assets include:

  • Retirement fund benefits
  • Bank deposits, including foreign currency deposits
  • Participatory interests in collective investment schemes
  • Life and Non-Life Insurance policies
  • Securities

As of 2021, unclaimed benefits in the retirement fund sector are the most significant contributor to the pool – approximately 53%.

The collective investment schemes (CIS) and life insurance sector is also a sizable contributor at 38%, followed by central securities depository participants (CSDPs) and the banking sector at 5% and 4%, respectively.

FSCA Deputy Commissioner Katherine Gibson noted that, in monetary terms, the data shows:

  • R47 billion in unclaimed assets in retirement funds.
  • R33 billion approximately in life insurance and collective investment schemes.
  • R3 billion in dormant bank accounts.
  • R4.5 billion in dividend accounts (CSDPs).

The graph below represents the sums and distribution of unclaimed assets from 2018 to 2021.

Source: FSCA

How the figure got to R88.56 billion

According to the FSCA, the reasons for the nature and extent of the problem of unclaimed assets in South Africa vary by sector, but the most common reasons are:

  • Asset owners’ failure to keep financial institutions updated with their contact details.
  • Financial institutions’ failure to update the contact and personal details of beneficiaries and to inform them that they have unclaimed assets.
  • Inadequate record keeping by financial institutions and intermediaries in the value chain.
  • Inconsistency in identifying and treating unclaimed assets, including reunification efforts, across the financial sector.
  • Employers fail to provide retirement funds with complete details of the fund’s members.
  • Changes in intermediaries and fund administrators.

The sectors with the highest amount of unclaimed assets – approximately 60% – are occupational funds in the mining, motor, metal and engineering industries.

A recent analysis performed by the FSCA on the unclaimed benefit member data of the top 20 funds revealed that only 25% of members have valid South African identification numbers, highlighting the difficulty of tracing members with unclaimed retirement benefits.

The FSCA’s recommendations to address the unclaimed assets

Kamlana said the authority’s most significant proposal to tackle the issue of unclaimed assets is the establishment of a Single Central Unclaimed Assets Fund.

Under this fund, all unclaimed assets, once identified as such, would be transferred and managed on behalf of the financial sector.

“The main objectives of such a central fund will be to accept and manage unclaimed assets, prioritise the reunification of those assets with their beneficial owners, pay valid claims, and distribute funds that are not reserved for valid claims for the benefit of positive impact,” the FSCA said.

Alternatively, such unclaimed assets can be transferred to the National Revenue Fund for the same purpose.

The FSCA also proposes a minimum threshold for unclaimed assets, below which assets will not be actively traced.

The FSCA proposed 11 additional recommendations to support a holistic and consistent approach to treating lost accounts and unclaimed assets.

“We don’t profess to have all the answers but want to have robust and wider engagement about how to locate beneficiaries and minimise the build-up of these unclaimed assets over time,” said Gibson.

“We are approaching this from a fairness point of view on behalf of customers, most of whom are from vulnerable backgrounds. This fits in well with our wider consumer protection framework,” she added.

The Full FSCA Discussion Paper – a framework for unclaimed financial assets in South Africa 2022 – can be downloaded here.


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