Why Treasury’s unclaimed assets plan has retirement funds worried
Industry supports centralised tracing but warns that moving R51bn in retirement assets could affect protections and long-term returns.
The South African Treasury has proposed a plan to centralise the management of nearly R90 billion in unclaimed financial assets, including retirement funds, sparking concern among industry experts. The plan suggests transferring these assets to a single entity, the Corporation for Public Deposits (CPD), which manages deposits from public-sector entities.
However, experts warn that this transfer may remove the protections currently afforded to retirement savings under retirement fund legislation. The discussion paper, open for comments until September 19, proposes possible cut-off periods for claims as reaching or exceeding 110 years of age, or 45 years after the asset became payable.
Niki Giles, head of strategy at Prescient Fund Services, highlights the concern that transferring retirement assets to the CPD would override fiduciary obligations, potentially impacting the real purchasing power of savings over time. Nancy Andrews, head of legal at Discovery Corporate and Employee Benefits, expressed concerns about the potential loss of protections for retirement funds in a centralised fund.
Industry stakeholders support the idea of a centralised database for searching and tracing unclaimed benefits, emphasizing the need for stronger tracing, higher-quality data, and a simple public search-and-claims process.
Written by urgent.news from The Citizen's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
