CWAO IN THE NEWS

(CWAO is an active member of the Unclaimed Benefits Campaign)

This short deadline has not allowed the proper participation by our members in a proposal affecting millions of beneficiaries across South Africa and the region, and an extension until the end of September would be fair. Still, the UBC has prepared detailed comments on the discussion paper, and will this Friday, deliver the proposals we make for the centralisation of stranded financial assets.

UBC has called for unpaid benefits to be centralised since the campaign began in 2017. For years, former workers have struggled to establish whether their unpaid benefits exist, which fund holds them or how to submit a claim. Fund administrators have controlled access to this information while continuing to charge administration fees that reduce the money available to pay beneficiaries.

Treasury’s proposal acknowledges that tracing is fragmented across institutions. However, it does not adequately confront the failure of administrators to trace and pay beneficiaries, nor does it answer the problem of funds deregistered by the FSCA. Treasury’s first step should be to investigate these. We demand that every deregistered fund must be reviewed to establish whether they still owed members when they were closed and whether these assets were disposed of lawfully. Workers’ benefits must not disappear into a central pool without this investigation happening first.

The UBC also submits that a centralised ‘unclaimed’ benefit fund should not be controlled by existing fund administrators or operated as an extension of National Treasury. The fund should be governed by an independent board whose members cannot have a direct or indirect financial interest in an asset manager appointed to invest the money.

The UBC also submits that beneficiaries must not pay for being found. Tracing fees and administration or payment costs must not be deducted from an individual worker’s benefit. UBC’s position is clear: a benefit that has already become payable may not be reduced simply because an administrator failed to trace the worker promptly.

We also demand that ‘missing records’ not be used as an excuse to refuse a worker’s claim. It is well documented that tens of thousands of workers in South Africa had deductions made by employers for provident or pension funds but were never provided with the name of the fund or the details. Thus, many former workers can prove where they worked and for how long, but cannot identify the pension or provident fund to which they belonged. These workers must not simply be told that there is “no record” and therefore no benefit. Where the system has lost the records, UBC proposes a minimum compensation mechanism for workers who can prove a credible connection to an employer and provide evidence of their years of service, but whose retirement-fund records cannot be found.

The administrator of the proposed central ‘unclaimed’ benefit fund must lead a national programme to recover, preserve, digitise and cross-reference historical employment and retirement-fund records. Old payslips, employment and identity numbers, TEBA and mine records, union records, and correspondence and affidavits should all be considered as evidence of previous employment. And, disputed claims must be decided by an independent adjudication body, not solely by the administrator whose records failed to produce a match. UBC supports the creation of a stranded financial asset information exchange system, containing current information about unclaimed assets and the people entitled to them. The system should draw together lawful information from more than just the administrators of funds but relevant state and private institutions as well. Using this enriched information exchange, claimants should be able to:
search for benefits in their names, see which institution holds the money, and how much, and then submit their claim.

Claims support cannot be online only. Trained workers should be deployed in communities across South Africa and neighbouring countries to help people submit claims free of charge. Mobile service units and permanent offices should be established in areas where large numbers of beneficiaries live.

Retirement funds are owed to all contributors over the years to those funds and centralisation is only worthwhile if it finds them, ending years of obstruction, missing records and failed tracing. These are not Treasury’s assets, nor are they the property of fund administrators: they are workers’ wages deferred. Centralisation must therefore be about more than moving money from one set of institutions to another. It must restore workers’ ownership, recover what has been lost, expose what has been mismanaged and ensure that every person entitled to a benefit can find it and claim it.

Contact persons for interviews:
Linda Matunda (UBC Sebokeng branch) 082 499 5026
Dale T. McKinley (UBC steering committee chairperson) 072 429 4086
Mpho Radebe (UBC Duduza branch) 065 718 0390
MaNala Rampo (UBC Orange Farm branch) 081 870 1414

Category: PRESS RELEASE | WORKER RIGHTS