The BusinessTech reports that the National Treasury’s discussion paper on a single, central administrator for South Africa’s roughly R88 billion in unclaimed money, which we covered in August, has now drawn its first detailed industry pushback.
Under the proposal, a central administrator would maintain a database of unclaimed retirement benefits, dormant bank accounts, unpaid insurance claims and investment returns, coordinate tracing and run a public claims portal, while the Treasury holds the assets in custody through the Corporation for Public Deposits. Ownership stays with the original owner, but claims would expire 45 years after an asset becomes payable, or once the owner reaches age 110, with the balance then moving to the National Revenue Fund.
Industry response
Ashendran Padayachee, Head of Legal at Momentum Corporate, said the problem is partly linked to poor-quality member information and incomplete employer records, not just fragmentation across institutions. “As a financial institution, we often talk about a cradle to grave product and service methodology without necessarily focusing on client data to support that methodology over a product’s full lifecycle,” he said.
Rather than full centralisation, Padayachee suggested Treasury consider a system of common standards applied consistently across existing administrators. “A system of common standards applied consistently across existing administrators, effectively levelling the playing field, could offer many of the same benefits with less disruption, lower setup costs, and greater speed to implementation,” he said. He also warned that concentrating sensitive financial data and processes in one place could create new risks, including cyberattacks, platform failures and governance problems, and questioned whether the Pension Funds Act’s existing 24-month definition of an “unclaimed” benefit should simply be applied across other financial products, given the differing contractual and regulatory nuances of each sector.
Padayachee described the discussion paper as a reasonable starting point for a broader industry debate about reuniting people with their money, while cautioning that Treasury’s international comparisons may not translate directly given South Africa’s own fragmented pension-data environment. “The paper suggests that an asset ceases to be claimable after 45 years after the asset became payable to the owner or when the owner reaches 110,” he said, and believes those thresholds need further consideration given the potential legal implications for ownership rights.
Treasury has not yet responded publicly to the industry’s specific objections, and the discussion paper remains open for comment. The practical question for financial institutions is whether the final model asks them to hand data and custody to a new central body, or simply to meet common standards while keeping their own tracing operations in place.
