19 Sep Why can beneficiary payments take time?
The points listed below will give you an idea why a beneficiary payment is not as straightforward as one imagines.
Fiduciary Duty and Investigation.
Fund trustees and pension fund administrators have a fiduciary duty to identify and trace all potential beneficiaries, including dependents and nominees. This is a time-consuming process, aggravated by complex beneficiary relationship dynamics.
Information Gathering and Verification.
Collecting accurate information about the deceased member’s dependents and nominees can be challenging, especially if the information on hand is incomplete, outdated, conflicting or the dependents and nominees cannot be contacted.
Legal and Regulatory Requirements.
Retirement funds and fund administrators operate under very specific legal frameworks such as the Pension Funds Act. These Acts and regulations are intended to protect the member’s wishes, and the interests of dependents and nominees.
Disputes and Fraud.
A dispute about the allocation of funds to beneficiaries or a dependent who was excluded can arise. It needs time to examine all claims to avoid later legal disputes.
Fraud is also a factor that the fund administrator needs to scrutinise, especially with cybercrime on the increase.
External Factors.
Factors causing delay can range from uncertainty about the cause of death which triggers a SAPS investigation, incorrect or incomplete documentation, and issues with SARS. These types of factors fall outside of the control of the pension fund management company.
Internal Processes.
To do a thorough job, fund administrators have efficient process and leading-edge technology, but this cannot override a SAPS investigation or assume that all dependents have been included. Our processes and technology make us more efficient, and this includes making sure that all procedures are followed to the letter.
Payment to a beneficiary is not an overnight process but our call centres, walk-in centres, and digital engagement platforms can help you to understand where the process is, why it’s there, and what needs to be done to facilitate payment.
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Salt EB is South Africa’s leading independent employee benefit management company.