Mamello Mosiana | Daily Maverick | 17 June 2020 |
While few immediately associate youth issues with pensions, the reality is that many young people actively participate in and even depend on the pensions industry. This includes their participation in the ongoing struggle of millions to access more than R42-billion in pension benefits owed to individuals and families.
Young people interact with the pensions industry in various ways. Some in formal employment already contribute to a pension or benefit fund or are considering which fund to choose. Those counted among South Africa’s spiralling youth unemployment figures (now at 53.18%) might never have considered a pension, but they will surely need it if they are to escape poverty. Then there are the many children being raised by their grandparents whose only source of income is their pension.
But there is another group. The young people who are actively trying to secure the unpaid pension benefits of parents, grandparents or relatives who have been failed by the pensions industry. Whichever way you slice it, pensions are an intergenerational issue, making the misdeeds of the pensions industry as much a youth justice issue as they are a geriatric one.
In November 2019, Open Secrets released its investigative report The Bottom Line: Who Profits from Unpaid Pensions? The investigation catalogues the cancellation of over 6,000 pension funds in both flawed and unlawful ways. Hundreds of these funds had still not paid out their members. The Bottom Line implicates private fund administrators and the regulator – the Financial Sector Conduct Authority (FSCA) – in failing to fulfil their legal duties during the cancellations scheme and avoiding accountability in the fall-out.
Beyond the cancellations scheme, there are billions in unpaid benefits that remain in active funds. These include dedicated ‘unclaimed benefits funds’ set up by fund administrators to preserve the benefits until their beneficiaries are found and paid. Fund administrators and asset managers continue to earn fees from these assets. Yet administrators, fund trustees and the regulator – despite having significant resources – have not done enough to ensure that these funds are paid out.
The Bottom Line was accompanied by a booklet, Look Beyond the Bottom Line, which tells the stories of pensioners and other beneficiaries from the Unpaid Benefits Campaign and the Cape Town Ex-Mineworkers Forum. Their stories highlight how an unscrupulous industry – including former employers, fund trustees and fund administrators – has dragged them from pillar to post with little consideration for their plight.
Many of the people we spoke to live in dire poverty. They explained how receiving their benefits would allow them to fix their homes, feed their families and retire with dignity. Many of them were grandparents and the primary caretakers of grandchildren who they support on the measly state pension. During the interviews, some of these children played outside or sat next to their grandparents as they relayed their stories.
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