Imagine being 80 years old and in dire need of an eye operation to restore your waning sight and you cannot afford it.
On one fateful day, your telephone rings and the voice on the other side claims that you are owed thousands of rands by your old pension fund.
That is exactly what happened to a retired priest who was traced by Benefit Recovery Services (BRS).
To date BRS has traced 126 000 beneficiaries and distributed R570 million after successful tracing in the first two years of its existence.
BRS’s core function is to assist financial services companies and pension funds to find and communicate with the beneficiaries of unclaimed money held by companies and funds.
Safika Investment Holdings chief executive Vuli Cuba said the service the company renders were a manifestation of “soft of invisible black economic empowerment.”
This would be the kind that does not focus on explicit equity and gender requirements.
“We actually do things that even in the core, even though they are commercial, they are of much more benefit to the society than even the money that you make in the process.
“So if you think, you release money from institutions that is then distributed across the country and boosts the economy. This a very important empowerment component.”
Safika owns 51 percent of BRS. The company plans to help distribute an estimate R80 billion in pension funds surpluses in the next few years.
Another R8 billion in other unclaimed benefits remains in the coffers of pension and insurance funds across the country.
BRS was formed after Safika teamed up with information technology group ICL, financial services specialist MGF Capital and businessman Brian Burt.
The money belongs to former contributors who were not possibly aware that they were entitled to funds after the Pension Fund Act was amended in December 2001.
Pension funds are obliged by law to apportion this money to its rightful owners within the next three to five years.
“We have built up capability to assist the funds to do this exercise effectively with the advertising requirements and to host an incoming call centre,” said BMR managing director Richard Stride.
Tracing members is, however, not that easy and depending on their commercial activity, they can take up to three months to locate, Stride says.
“It is still only the beginning and we believe there is a market need out there. A lot of pension funds still have to go through the process (of tracing former members).”
As a fairly young business BRS’s strategy will continue to focus on establishing databases and building relationships with institutions.
“As the market becomes more competitive and other issues come into the business, maybe then we will change our strategy,” said Cuba, suggesting the company may extend its operations into other countries.
BMR’s clientele includes, Liberty Life, Sanlam, Barlowold Pension Fund, SABC, Old Mutual, Grintek Provident Fund, AECI Employees Pension Fund and Telkom.
Stride says having Safika as an empowerment partner has lent credibility to the company to the company due to its financial services expertise.
Cuba also added that Safika funded the business “as normal investors would".
“We put our money where our mouth is and we continue to be the largest funder proportionally to our shareholding in the business.
“So we are not a black economic empowerment that happens to be attached to something because there are transformation issues. It is a business that Safika started,” said Cuba.
In the Eastern Cape, BRS has assisted more than 8 200 people with the disbursement of R37, 5 million.
Unclaimed funds include insurance policies, pension fund surplus values, demutualisation shares, forgotten bank or society accounts and interest growth over substantial time.
Common reasons for unclaimed funds range from beneficiaries changing address to unclaimed matured retirement annuities.
“We believe we are only starting to make a dent in the problem of tracing members and the distribution of these unclaimed benefits.
“Our focus over the next three to four years is to make a significant contribution to that distribution and to be the leading player in that distribution,” says Stride.
Irene Louw |
