South Africa: Retirement Rogues and the Casualties of Circumstance
There is a mountain of money, R42bn to be exact, sitting in unclaimed benefit schemes out there, just sitting there, getting fatter, which means money for jam for the fund managers, but doesn’t afford any jam to the estimated four million people who own this stash of cash.
There are multiple reasons for there being an estimated total of R42-billion in benefits owed to more than four million pensioners and pension fund members, according to the Financial Services Conduct Authority (FSCA) 2018 Annual Report.
According to a report, “The Bottom Line, Who Profits From Unpaid Pensions?” released by advocacy group Open Secrets on Wednesday 30 October 2019, private fund administrators and the regulators have failed collectively to build transparent and accountable structures for the management of these funds.
“Instead, a system of perverse incentives flourishes,” it says. “Administrators derive considerable income and profit from fees related to managing assets.”
The FSCA concurs, saying in its annual report that if liabilities for unclaimed benefits, and assets of equivalent value, are transferred to an unclaimed benefit fund over which the administrator has effective control, it may be able to ensure that service providers related to it, such as asset managers, derive significant…
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