The National Treasury intends to consolidate 88 billion rand in unclaimed financial assets to ensure the safekeeping of forgotten funds and guarantee their accessibility to rightful owners.
Billions of rand held in forgotten bank accounts, unpaid dividends, and unclaimed pension payments may soon be gathered in one place as the National Treasury reorganizes the system for handling money that has lost contact with its owners in South Africa.
The Treasury has proposed creating a central administrator to manage unclaimed financial assets, track owners and beneficiaries, and ensure the security of these funds until they are legally received.
The proposal was outlined in a discussion paper published by the Treasury on Thursday titled 'Framework for Centralizing Unclaimed Financial Assets in South Africa.' According to 2022 data from the Financial Sector Conduct Authority, there is an estimated 88.56 billion rand in unclaimed financial assets in South Africa.
Treasury's Proposal
The Treasury put forward a proposal whereby financial institutions holding unclaimed financial assets must transfer these assets to a central administrator.
Subsequently, the assets will be invested by the Corporate Public Deposits (CPD)—a subsidiary of the South African Reserve Bank responsible for managing public deposits from various state entities.
According to the Treasury, this proposal will replace the existing fragmented approach with a unified system for consolidating information, improving tracking efforts, standardizing accounting, and protecting unclaimed assets until owners or beneficiaries receive them legally.
The Treasury also noted that consolidating assets through a central administrator and investing them in the CPD could help reduce the loss of unclaimed assets caused by fragmented administrative costs.
The reforms will be implemented in phases, starting with unclaimed pension payments, and then expanding to other financial assets. The Treasury is also considering the timeframes within which owners and beneficiaries should be able to claim the money.
The discussion paper suggests two options: a limit of 45 years from the date the asset became unclaimed, or allowing claims until the beneficiary reaches the age of 110. The document's goal is to develop a system that centralizes the management of unclaimed financial assets while improving efforts to re-establish contact between the funds and their rightful owners and beneficiaries.