Government’s new plan slammed as ‘expropriation of private property’
The government’s plan to centralise more than R88 billion in unclaimed financial assets has been criticised as “expropriation of private property”.
There are concerns that the proposal could ultimately allow the state to take ownership of individuals’ money.
This is the feedback from trade union Solidarity, which has warned against the proposed centralisation of privately held pension benefits, dormant bank accounts, unclaimed insurance payouts and investment returns.
The union argued that the state should help reunite beneficiaries with their money rather than take control of the process.
The National Treasury published a draft framework for centralising unclaimed financial assets in August 2026, initially focusing on retirement fund benefits.
Finance Minister Enoch Godongwana confirmed during the Medium-Term Budget Policy Statement that technical work was continuing on the institutional, legal and operational arrangements needed to implement the plan.
Marius Croucamp, Solidarity’s Deputy General Secretary for Strategy, said the proposal amounted to nationalising privately owned financial assets.
“It is clear to Solidarity that the plan to centralise privately held unclaimed assets is a way for the state to nationalise privately owned assets through the back door,” he said.
“Although the stated aim is to help beneficiaries claim their money, the actual outcome is that the state wants to take ownership of private funds, particularly pension money.”
Croucamp said this raised concerns about property rights and could be viewed as “the expropriation of private property”.
Solidarity believes the government’s involvement should be limited to establishing a regulatory framework that allows existing financial institutions to manage the tracing and payment of unclaimed benefits.
“It is absurd that the state now wants to take this responsibility away from the funds, thereby disadvantaging their members. Private funds belong to their rightful beneficiaries, not to the state,” Croucamp said.
The proposed framework aims to address the difficulty of reconnecting people with money they have lost track of after changing jobs, moving homes, changing surnames or leaving the country.
Outdated records and incomplete employer information can also make tracing beneficiaries difficult, particularly when people die without their families knowing about their financial assets.
We shouldn’t rush into full centralisation
Under Treasury’s proposal, a central administrator would maintain a database of unclaimed assets, coordinate tracing efforts and operate a public claims portal. It would also process valid claims on behalf of financial institutions.
The Corporation for Public Deposits would hold the assets in custody, while the money would legally remain the property of its rightful owners.
However, the Treasury has proposed that claims could eventually expire, with unclaimed assets transferred to the National Revenue Fund after 45 years from the date they became payable or upon the owner reaching 110 years of age.
This provision has raised further questions about whether the state should ultimately be able to retain money that beneficiaries have not claimed.
Ashendran Padayachee, head of legal at Momentum Corporate, said the discussion paper provided a reasonable starting point for industry debate but warned against rushing into full centralisation.
He said maintaining accurate customer information throughout the life of a financial product remained a major challenge.
“As a financial institution, we often talk about a cradle to grave product and service methodology without necessarily focusing on client data to support that methodology over a product’s full lifecycle,” he said.
Padayachee suggested that common standards across existing administrators could deliver similar benefits with less disruption and lower implementation costs.
“A system of common standards applied consistently across existing administrators – effectively levelling the playing field – could offer many of the same benefits with less disruption, lower setup costs, and greater speed to implementation,” he said.
He also warned that concentrating sensitive financial data and processes in one place could create new risks, including cyberattacks, platform failures, and governance problems.
Padayachee said the priority should remain reuniting beneficiaries with their money, while ensuring the proposed time limits and their implications for ownership rights receive further scrutiny.
Solidarity said it intended to make further submissions and consider available avenues to protect private ownership of retirement benefits and other financial assets.
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