Thousands of workers who had their services terminated due to retrenchment, dismissal or resignation have not claimed their withdrawal benefit from provident funds.
The unclaimed benefit runs into billions of rands.
According to the tax laws, if the withdrawal benefit is not claimed after three years, the fund is expected to pay tax on that money.
Gerda Grobelaar who is an actuary at Mibfa said “the unclaimed benefits are not paying any administration fee to the fund which means that active members are subsidising former members who did not claim their withdrawal money.
The funds must consider charging administration fee to the former members”.
The money could be invested into long term vehicles but the challenge is that we don’t know when the former members will come to claim or withdraw their benefit.
However, if the member comes forward and requesst that the fund pay the money on retirement then the fund will appropriately invest the money.
All former members, or their beneficiaries, who did not claim either their withdrawal benefits or death benefits are advised to contact the human resource offices or the funds directly.
We will in each edition of Numsa News publish one fund unclaimed benefit account.
Sam Tsiane is Numsa’s benefits coordinator
Source
Numsa News No 2