What is the definition of an unclaimed benefit?
With effect from the 1st of November 2008 a definition of unclaimed benefits was introduced into the Pension Funds Act in terms of the Financial Services Law General Amendment Act, 2008. Simply put, an unclaimed benefit is a benefit not paid to a member, former member or beneficiary within 24 months of the date on which it became legally due and payable.
Why do funds need to trace unclaimed benefit members?
Tracing and paying unclaimed benefits is one of the more administratively difficult tasks that trustees face. Trustees have a serious fiduciary duty in managing the funds on behalf of members and beneficiaries. One of these responsibilities is to avoid the buildup of large numbers of unclaimed benefits in a fund. Should the issue of unclaimed benefits keep arising, trustees will need to spend time dealing with the problem, keeping them from addressing other important fund matters.