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Business Reporter

The Insurance and Pensions Commission (Ipec) says it will continue to enforce compliance with regulations to ensure that unclaimed benefits, which have grown to nearly $3 billion, maintain a downward trend.

An unclaimed benefit is any lump sum or pension benefit that is due to a retirement fund member (or his/her beneficiaries) that has remained unclaimed for a period of time.

According to the regulator, unclaimed benefits from pension funds exist for a number of reasons, from member and beneficiary details not being updated, to fund members not informing their dependants about these benefits.

According to the Ipec’s pensions report for the quarter to March 2022, there was a noticeable decrease in members with unclaimed benefits from 168 642 in March 2021 to 146 370 in March 2022, translating to 13,21 percent decline.

“The decrease in unclaimed benefits is a step in the right direction following the on-going awareness campaigns by the Commission targeting members of the public to come forward and claim their benefits,” said the insurance and pensions regulator. Ipec noted that the decline also follows the enforcement of compliance with the Treating Customers Fairly framework as well as Know Your Customer (KYC) requirements by the Commission.

“The Commission will continue to enforce compliance with regulations to ensure that unclaimed benefits maintain a downward trend,” it said.

Ipec also noted that there was a slight increase in the number of pensioners by 6,34 percent mainly due to members of pension funds reaching retirement age over the review period.

The pensions industry regulatory body has over the years been calling on industry players to improve awareness over the unclaimed benefits which had continued to grow.

As at December 2020, unclaimed benefits amounted to $0,62 billion and had grown to $2,97 billion as at December 2021. The increase in unclaimed benefits was mainly as a result of revaluation gains on assets supporting such liabilities.

Meanwhile, the industry’s total membership, including beneficiaries for the March 2022 quarter slightly increased, surging by 2,07 percent from 935 053 reported as at March 31, 2021 to 954 395 as at March 31, 2022.

Ipec said the increase in membership was largely attributable to the registration of funds over the comparative period.

“However, the Commission is working with the funds that are transferred from participating employers to set up their own funds to eliminate the possibility of double counting of membership,” it said.

The report noted that the number of deferred pensioners increased by 4,34 percent between the inter-comparative periods.

“The resignation of employees from some sponsoring employers was the main driver for the increase in deferred pensioners as well as dissolution of some pension funds,” Ipec noted.

The industry’s asset base grew in nominal terms by 175,56 percent to $488,12 billion from $177,12 billion recorded in March 2021. 

The share of listed equities to total assets has increased on account of revaluation of the portfolio.