Treasury’s big plan for South Africa’s R88 billion in unclaimed assets

National Treasury aims to centralise R88bn in unclaimed financial assets, ensuring that forgotten funds are safeguarded and accessible to rightful owners

Billions of rand in forgotten bank accounts, unpaid dividends and unclaimed retirement benefits could soon be brought under one roof as National Treasury moves to overhaul how South Africa deals with money that has lost touch with its owners.

Treasury has proposed a central administrator to manage unclaimed financial assets, trace owners and beneficiaries, and ensure the money is safeguarded until it is lawfully claimed.

The proposal is outlined in a discussion paper published by Treasury on Thursday, titled A Framework to Centralise Unclaimed Financial Assets in South Africa .

South Africa is estimated to have R88.56 billion in unclaimed financial assets, according to 2022 figures from the Financial Sector Conduct Authority.

Treasury has proposed that financial institutions currently holding unclaimed financial assets be required to transfer those assets to a central administrator.

The assets would then be invested with the Corporation for Public Deposits (CPD), a subsidiary of the South African Reserve Bank responsible for managing public deposits from various government entities.

According to the Treasury, the proposal would replace the current fragmented approach with a single system to consolidate information, improve tracing efforts, standardise record-keeping, and safeguard unclaimed assets until owners or beneficiaries lawfully claim them.

Treasury said consolidating the assets through a central administrator and investing them with the CPD could also help reduce the erosion of unclaimed assets caused by fragmented administrative costs.

The reforms would be introduced in phases, starting with unclaimed retirement benefits before being extended to other financial assets.

Treasury is also considering how long owners and beneficiaries should have to claim the money.

The discussion paper proposes either a 45-year limit from the date an asset becomes unclaimed or allowing claims until a beneficiary reaches the age of 110.

The paper is seeking to establish a framework that would centralise the management of unclaimed financial assets while improving efforts to reconnect the money with its rightful owners and beneficiaries.