More than R17 billion unclaimed in unit trusts & policies
- Almost 150,000 policies and unit trusts remain unclaimed in South Africa.
- Many of the policies belonged to people who have died, and whose heirs are not aware of their investments.
- Some investors have also emigrated.
- There is no central point to find out whether you are owed money – you have to contact companies directly.
Last year, South African financial companies traced the owners of unclaimed policies and investments to the value of R8.1 billion – but the recipients of more than 147,000 policies and unit trusts have still not been found.
Accordingly, some R17.1 billion remains stuck in unpaid policies, the Association for Savings and Investment South Africa estimates.
Companies are obliged to search for investors for at least three years after assets are categorised as “unclaimed”.
First, there needs to be “trigger event” that requires a company to investigate whether a customer’s contact details are still current and what they want to do with their investment.
“Trigger events” include when a payment made to a customer is returned by the bank, or, for example, when a customer turns 80. That triggers the requirement to get in touch and check that all details are up to date.
Depending on the outcome of the investigation after the trigger event, the company may categorise the asset as “unclaimed”. Once this happens, they have three years to search for the owner.
It’s remarkable that in this age of social media, that companies are still struggling to find people, says Rosemary Lightbody, senior policy adviser at ASISA. “Still, we see that even while companies are spending much effort and time, including paying for tracing agents, they are not getting hold of beneficiaries.”
It is thought that many of the unpaid claims are for deceased investors, whose heirs and other beneficiaries may be unaware of their investments. Also, some older investors may have developed dementia, and may have forgotten about their policies.
Emigration is another factor, with investors moving overseas and not alerting local companies.
“Some of them may also not think that the rand value of their investments here is worth the hassle of completing forms and migrating the money,” says Lightbody.
According to ASISA rules, once all reasonable efforts to trace the customer, heirs or beneficiaries have been exhausted over a three year period, the assets may be used for socially responsible investments.
But ASISA members have also committed to pay out unpaid claims at any point, no matter how many years have passed – as long as you can prove that you are the legal beneficiary of the claim.
Read the full story on: Business Insider South Africa.