‘It is estimated that there are R50-billion in unpaid benefits. We say unpaid because they are unpaid, not unclaimed. The administrators like to use the word unclaimed because they want to blame people but, as we know, many people have been trying to claim for years and still have not been paid,” said writer and political activist Dr Dale McKinley when he opened the People’s Hearing on Unpaid Pensions at The Women’s Jail, Constitution Hill, on Tuesday.
Daily Maverick and many others, including the Pension Funds Adjudicator, the Parliamentary Standing Committee on Finance, the Financial Sector Conduct Authority (FSCA), Alexander Forbes, TEBA, Metal Industries Benefit Funds Administrators and the Minister of Finance, were invited to hear the testimonies of some who still struggle to claim their benefits.
None of the above-mentioned state institutions honoured the invitation.
The hearing, chaired by advocate Geoff Budlender SC, the Black Sash’s Amanda Rinquest and activist Shaeera Kalla, unpacked the issue of unpaid benefits which affects more than four million South African and migrant pensioners.
‘A fundamental failure’
Open Secrets and the Unpaid Benefits Campaign have declared the issue of unpaid pensions a “fundamental failure” by state regulators and pension fund administrators.
While both organisations have been hard at work tracking and trying to help beneficiaries who have not received what is due to them, millions of people have not received pensions owed to them or their beneficiaries from private pension funds.
Daily Maverick spoke to some of these people to learn more about their struggle to access their pension benefits. They are part of the Unpaid Benefits Campaign (UBC), a civil society organisation in SA campaigning on their behalf.
Thomas Malokotsa, a member of the UBC, said the organisation had managed to track down about 1,750 former employees of Kimberly-Clark of South Africa (Pty) Ltd, who are owed pension benefits and have since submitted their names to the FSCA. But, from the list of claims, only one person received their pension benefit.
“There is so much inconsistency with the FSCA. They are ever publicising so many unclaimed pension benefits, yet when we submit names of rightful beneficiaries and the required particulars, it’s either they can’t trace you or whoever you might be representing on the system,” said Malokotsa.
“At the same time, they told us they are not going to pay all the former pension fund contributors. We were contributing to one basket as whites and blacks, but when the surplus accrued, they started selecting who they want to pay.”
Malokotsa added: “We queried that, and asked who liquidated Kimberly-Clark and appointed the liquidator. They said the liquidator was appointed by the FSCA, but according to the law, the liquidator is appointed by the board of trustees. Alexander Forbes is hiding behind the FSCA.”
Pension funds cancelled
Open Secrets, in partnership with the UBC, found that thousands of pension funds had been cancelled over several years by pension administrators.
Malokotsa is still waiting for benefits from his deceased father’s pension fund, more than 30 years after his death. He said his father was a mineworker for almost three decades (since 1948), but that none of his benefits were paid to his family.
Malokotsa says he has been fighting for his father’s pension benefit since 2010, joining the Unpaid Benefits Campaign in 2017 after discovering hundreds of others were in a similar position.
He says he has been to various administrators including Alexander Forbes, the Chamber of Mines, Goldfields and Momentum, but that everywhere he went, he was told there were no records of his father. However, he recently found a record of his father at TEBA, a recruiting agency for the mines.
“My father was a migrant worker, a Lesotho national, and he was told that he doesn’t qualify for any of his pensionable benefits for all these years since he started working in the mines in 1948, for more than 27 years. He died in 1985 with no pension benefits.
“I am angry and sad at the same time… you can’t expect a person like my father — or the rest of the people owed pension benefits — to work for so many years and then be deprived of access to their entitled benefits. It doesn’t make sense.
“I will stop at nothing to get what is rightfully my father’s benefit,” said Malokotsa. He said he asked the FSCA to investigate his father’s case last year, but has not received a response.
A year after retiring from Sasol, after contributing monthly to the pension fund for years, Frans Setlale has not received his pension benefit.
Setlale said the company administrator referred him to the Pension Funds Adjudicator, where he was told they were still calculating his benefit.
“When I followed up again last month, they said they are still busy because there has been a lot of corruption and a change of administration at Sasol… How can they still be calculating my pension money after a year? What must I do now? What must my family eat?
“The benefit was meant to sustain my family until we have another source of income.”
Jacob and Esau Phofu
Jacob and Esau Phofu are 76-year-old twins who worked in the engineering sector for almost three decades. They have been waiting for their pension funds since 2009. They told Daily Maverick they need the money to improve their lives and be able to access private medical care.
“At this old age that we are in, we are often sickly and require medical attention. We can’t be queueing at public facilities the whole day waiting to be assisted. Our pensions could come in handy in affording us private medical care and a generally much better and happier life.
“We want to age gracefully with dignity. Maybe take some of the money and take a trip to Durban because we have always wanted to do that. We don’t want to die then come back as ghosts just to haunt people for our hard-earned money,” said Jacob.
Esau said it hurts him because they worked hard and Momentum deducted money from their accounts every month, only for that money to be withheld when they needed it the most.
“I got injured and lost one of my fingers while on the job, but was never compensated. At this age, I still live at our family home. It is not a nice feeling. I have plans to build my own home for my family. But without our pension funds… that dream is far-fetched.
“Some of the money would come in handy helping invest for the education of my grandchildren… their parents are unemployed and our old age grant is insufficient to cover all their needs and mine,” he said.
While most of the testimonies were predominantly from men, there were accounts by women struggling to claim for general and domestic work, and on behalf of their spouses or other family members.
Modiehi Tshabalala was the first woman to give her testimony. A domestic worker for 23 years, Tshabalala lost her job at the beginning of the pandemic in 2020. She says all she received from her pension benefit was R9,000.
“Its sad to even think about it… all those years working tirelessly as a domestic worker so that when I eventually retire, my money can take care of me and my family — only to get R9,000 that couldn’t even last for three months,” said Tshabalala.
“And even then, I only got that money after reaching out to the CCMA for help. I don’t see the point of the money being deducted from my salary when I can’t enjoy it. I believe I was eligible for more, which is why I have reached out to the UBC for help.”
Dorothy Britz, 75, is a mother of two who has also not received her husband’s pension since he died.
“My husband passed away when our children were six and eight years old. He was the breadwinner. His death was tragic and affected our livelihood. We had to find other means of survival. I didn’t even know about pension funds or how it worked… I never asked him about his work because mine was to take care of our home and our children,” said Britz.
“Our life has been hard since his passing and I had to find other means of survival for my family until I was eligible for the old age grant.”
Read more about similar cases from the Open Secrets investigative report, The Bottom Line: Who Profits from Unpaid Pensions?
In 2013, while working for the Financial Services Board, Rosemary Hunter blew the whistle on the cancellation of 6,757 supposedly “dormant” pension funds between 2007 and 2013. This followed a shift from single-employer, or stand-alone occupational retirement funds, to umbrella funds, and she pursued the matter in court.
Hunter lost the case in 2017 on the grounds that the FSCA had already launched investigations into the cancelled pension funds.
Read more in Daily Maverick: “Administrators sit on more than R42bn in unpaid pension benefits — earning a fee, of course”
Despite losing the battle in the Constitutional Court, Hunter says the steps she took have raised awareness around the issue of unpaid pensions.
She says that since then, there have been signs of improved administration at the FSCA, with Liberty — named as one of the largest administrators involved in the irregular cancellation of pension funds — showing improved levels of transparency and efforts made to reconstitute cancelled funds.
“There’s also a new executive committee at the FSCA, and there appears to be a culture change and a greater willingness to address the problem of unclaimed benefits,” she said. DM
This content was originally published here.