Behind every unclaimed benefit is a member, beneficiary or dependant who may be entitled to money that could make a meaningful difference in their life. For trustees, reducing unclaimed benefits is not only a regulatory responsibility, but also a governance imperative. Effective tracing begins long before a benefit becomes unclaimed. It starts with strong governance, accurate records and proactive member communication.
The challenge for trustees is twofold: ensuring that unclaimed benefits are traced and paid, while also putting measures in place to prevent benefits from becoming unclaimed in the first place.
Why do benefits become unclaimed?
Benefits can become unclaimed for many reasons, most of which stem from information gaps that develop over time. Members change jobs, move homes, change cell phone numbers, lose old documents, or pass away without their families knowing which fund they belonged to.
Ultimately, trustees and administrators have an important responsibility to make the tracing and claims process as effective and accessible as possible. Claimants may still need to provide documentation to prove their claim.
In some cases, employer or administrator records may be incomplete, outdated or difficult to access, making it harder to identify and locate former members and beneficiaries. In some sectors, historical employment patterns added to the challenge. For example, industries such as mining, motor manufacturing and metalworking employed many migrant workers.
In some cases, records may have been incomplete or inaccurate because workers did not have formal identity documents, used different names, or provided little personal information. This highlights why accurate member data is one of the most important tools available to trustees in preventing future unclaimed benefits.
What can trustees do?
Trustees are ultimately responsible for ensuring that the fund is managed in the best interest of its members, including overseeing how unclaimed benefits are identified, traced and paid. While operational duties may be delegated to administrators or tracing agents, accountability cannot be delegated. Trustees remain responsible for ensuring that appropriate controls, oversight and reporting mechanisms are in place.
Working with tracing agents
Tracing agents can help funds find members and beneficiaries, but trustees should manage this relationship carefully. Because tracing agents are not subject to a dedicated regulatory registration framework, trustees should conduct appropriate due diligence before appointing them.
Trustees should ensure that tracing agents:
- are properly appointed under a formal written agreement.
- Comply with privacy and data-protection requirements.
- Operate according to agreed service standards.
- Are remunerated by the fund rather than by members or beneficiaries.
Regardless of the size of the fund or the value of its unclaimed benefits, trustees have a responsibility to ensure reasonable efforts are made to trace and pay the people entitled to those benefits.
Trustees do not have to conduct the tracing activities themselves, but they must ensure effective systems, policies, oversight and accountability mechanisms are in place.
Reducing unclaimed benefits is not simply about finding people after they have disappeared from the system. It is about creating the conditions that prevent members and beneficiaries from being lost in the first place. Strong governance, accurate records and ongoing engagement remain the most effective tools trustees have to achieve this.
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All content is for general educational purposes and does not constitute formal financial advice. Always consult a qualified, licensed financial professional before making any financial decisions.