South African financial institutions are currently holding more than R90 billion in unclaimed benefits that rightfully belong to members of the public, according to a report in the Sunday Times. This staggering amount includes R4.5 billion in unclaimed dividends alone, according to a recent report. Banks, retirement fund administrators, insurance companies and the Johannesburg Stock Exchange (JSE) are all actively trying to locate millions of beneficiaries who may be unaware they are entitled to these funds.

R4.5 Billion Waiting To Be Claimed! Is Yours? JSE Launches Campaign For Unclaimed Dividends

The Financial Sector Conduct Authority (FSCA) revealed that the total value of unclaimed assets held by financial institutions reached R88.56 billion in 2022. Of this amount, retirement benefits accounted for 53%, while investment and life insurance schemes made up 38%. The current estimate now exceeds R90 billion, highlighting the growing scale of this issue.

Several key factors contribute to these funds remaining unclaimed. Many individuals fail to update their contact details with financial institutions, while some employers neglect to provide comprehensive member information to retirement funds. Additionally, numerous workers are never properly informed about their right to withdraw benefits when leaving employment. The situation is particularly challenging for foreign workers who depart South Africa after their work permits expire, as there are limited mechanisms to facilitate claims from their home countries.

The JSE launched its “Claim It” campaign in February 2024 to help shareholders recover approximately R4.5 billion in unpaid dividends. Vuyo Lee, the JSE’s Director for Marketing and Corporate Affairs, reported that nearly 65,000 people have already inquired about potential unclaimed dividends since the initiative began, with 8,100 successfully matched as beneficiaries of unpaid dividends from participating companies.

Standard Bank has partnered with fintech startup Robin Hood to improve the tracing of beneficiaries for unclaimed funds. Jonathan Lamb, Executive Head of Channels and Partnerships at Standard Bank Corporate and Investment Banking, explained that the current system for claiming benefits is often inefficient and confusing for potential claimants.

“The existing process is fragmented, manual, expensive and largely ineffective,” Lamb stated. “Most people don’t realize they’re owed money, and when they are contacted, the process can feel suspicious, like a potential scam, which results in low claim rates.”

The bank’s innovative approach assumes that individuals who held policies or were pension fund members likely also maintained bank accounts. In the first phase of their campaign, Standard Bank successfully matched about 13,000 retail customers with unclaimed funds and processed their payments.

“The results have exceeded our expectations in terms of both match rates and user engagement,” Lamb noted. “People responded quickly once they understood the legitimacy of the process, and they received their payments efficiently.”

The average payment amount has been around R3,000 per claimant. While this may not represent life-changing sums for most recipients, Lamb emphasized that “this money can make a meaningful difference – whether it’s buying groceries, covering school fees, or purchasing data to search for employment opportunities.”