Unclaimed benefit funds achieve significant increase in tracing success rates

The Mines 1970 Unclaimed Benefits Preservation Pension and Provident Funds has improved their tracing rate by 36,5% in the past 18 months to see more than R24-million in unclaimed benefits paid to beneficiaries.

Between January 2014 and July this year, the Funds have traced 37% of 69 071 beneficiaries - a marked increase from 2012, when just 0,5% of the beneficiaries were traced and only R5,2-million paid.

The Funds consists of 11 712 pension fund beneficiaries and 57 359 provident fund beneficiaries, located in South Africa and neighbouring countries. “We have traced 57% of the pension fund beneficiaries and 32% of provident fund beneficiaries,” said Chairman of the Mines 1970s Funds, Sue Fritz, who attributed the increased success rate to having “determined and passionate trustees who are morally and ethically driven”.

Almost 13 000 of the beneficiaries traced have been identified as deceased. “We continue with secondary tracing and 28% of the deceased beneficiary’s dependents have been located.”

Fritz said the trustees had brought Alexander Forbes on board, with their excellent systems and together they had implemented an innovative tracing strategy in January 2014. “We realised we needed a professional administrator to assist with systems as our core data was very limited.”

While their hit rate with tracing beneficiaries has increased, Fritz said the Mine 1970s Funds’ efforts were hampered by historical poor record keeping by the mining industry which resulted in a large number of incomplete records of employment during the 1970’s and 1980’s. “This is an industry-wide issue which makes tracing the beneficiaries incredibly difficult. In addition, once we successfully find the beneficiaries and have verified them, the lack of tax numbers is a problem, but we are liaising with the South African Revenue Service on this issue,” Fritz said. The lack of essential documentation such as copies of IDs, and service records, which are needed to finalise the processing of claims also regularly delayed payment.

One way of solving this issue is by collaborating with other funds. “We have close working relationships with the Mineworkers Provident Fund (MPF) and Sentinel and we cross-check each other’s data. People might not have been a member of our funds but they could be a member of one of the others. We have also checked MPF data from their roadshows in various SADC countries and the Eastern Cape.”

New innovations since the appointment of Alexander Forbes, include walk in centres and a help-desk, as well as people who can assist in all official languages. “We also changed our previous tracing initiative from one which was very passive to one which is very active and aggressive,” said Fritz. Tracing agents are only paid for those beneficiaries who are successfully located. The funds do not deal with “middlemen who unscrupulously charge fees to beneficiaries promising to assist them in claiming their benefits”, Fritz said.

Due to on-going issues with the post office, claims can now be lodged by fax or email. This has necessitated the implementation of additional controls to prevent electronic fraud.

Outside South Africa’s borders the Mines 1970s Funds is trying to trace qualifying former members. “Preliminary claim forms were distributed to Malawian District Labour offices and we have had 59 000 forms returned so far, with a success rate which is on par with other tracing endeavours.” The information we receive which does not match with the Mines 1970 Funds is sent to the MPF for cross-checking. “We are also finalising a partnership which would see Mines 1970 set up a desk in the MPF walk-in centres in Welkom, Carltonville, Mthatha, Klerksdorp and the Free State, which will further assist our desktop tracing initiatives.”

Proving the trustees’ commitment to pay is their telephonic outbound campaign, (through Alexander Forbes), whereby more than 7 000 people who have not returned claim forms are contacted weekly until their forms arrive for processing.

While beneficiaries continued to be found, Fritz said preserving the Funds capital was essential. “We changed our investment consultant to Alexander Forbes to ensure maximised returns from the Funds three asset managers for benefit of the beneficiaries. Over the past year the investment yields for the funds have exceeded the Fund’s investment benchmark – which is well over inflation.”