Advocate Sankie Morata CFP®, CEO of Sanlam Trust
Beneficiary funds are often discussed in the context of governance, compliance and legislation. While these remain very important, the retirement fund industry is also asking a bigger question: Are beneficiary funds in touch with the real lives of the children they’re meant to protect?
This was one of the key themes of a recent Sanlam Trust webinar for principal officers.
At the heart of the discussion was the fact that beneficiary funds are not simply financial vehicles. They are structures designed to protect vulnerable children after the loss of a parent or guardian, often during one of the most difficult periods a family will ever face.
“Beneficiary funds must never become distant from the real lives of the children they serve. Good administration is important, but care, communication and understanding are just as important when you are dealing with a child’s future,” says Advocate Sankie Morata CFP®, CEO of Sanlam Trust.
Understanding beneficiaries’ realities
The realities of South Africa’s social landscape make this responsibility even more crucial. Many beneficiaries are raised by grandparents, extended family members or caregivers in economically challenged households. In many cases, a single income supports multiple generations under one roof.
Rising inflation, mounting costs of fuel and groceries, school expenses and broader economic pressures are affecting beneficiary households like many others. Morata observed that this has led to a notable increase in requests for additional support and ad hoc payments.
“We are not living in isolation from what is happening in the world. The economic pressures facing families directly affect beneficiaries as well. Children still need food, transport, school uniforms and a safe place to live,” Morata said.
This means beneficiary funds and trustees cannot afford to take a purely administrative approach. Trustees and administrators must exercise empathy and diligence when assessing cases.
The webinar highlighted challenging practical realities that funds are having to navigate more frequently, including substance abuse, mental health issues, vulnerable guardianship arrangements, and the misuse of benefits intended for children.
Morata stressed that each case should be approached individually and responsibly.
“If this was my child, what would I do?” he asked during the discussion. “That is the question trustees and administrators should ask themselves when dealing with vulnerable beneficiaries.”
The conversation also reinforced the importance of strong governance and fiduciary responsibility.
Trustees were reminded that they remain accountable for the assets entrusted to them and have both a duty of care and a responsibility to act independently. This includes exercising diligence, thinking independently, and maintaining proper oversight over service providers and administrators.
Morata also cautioned against governance becoming detached from humanity. “In the beneficiary fund environment, we are not dealing with numbers on a spreadsheet. We are dealing with real children, real families and real futures,” he said.
Why data, engagement and governance matter
Another major focus area was the growing importance of accurate data, proactive member engagement and beneficiary record management.
Outdated records, missing information and changing contact details contribute to unclaimed benefits across the industry. Current estimates indicate that billions of rands remain unclaimed within the retirement fund environment in South Africa.
Morata believes many of these situations are preventable if funds, employers and administrators prioritise ongoing engagement with members and beneficiaries.
“Knowing your beneficiaries should not only happen when a claim arises,” he explained. “It should be part of an ongoing relationship and responsibility.”
Practical challenges facing trustees and administrators
Practical questions raised by principal officers during the webinar included how funds should respond when beneficiaries face substance abuse or mental health challenges, how beneficiary funds can reduce the risk of unclaimed benefits, and how trustees can better assess whether payments made to guardians are genuinely benefiting the children.
Morata noted that these situations require a practical, case-by-case approach rooted in diligence and compassion. This includes stronger verification processes, ongoing engagement with guardians, annual life-status checks, and using vetted service providers and support networks where necessary. He also stressed the importance of exercising proper due diligence when appointing or paying service providers such as rehabilitation centres, to ensure beneficiary funds are used in the child’s best interests.
Morata shared a practical example where a guardian submitted requests and quotations for funds to be used for a home extension and to purchase household items. Although supporting documents had been provided, further investigation raised concerns over actual benefits for the child. Morata explained that, in cases like these, beneficiary funds may need to conduct more rigorous due diligence, including engaging with schools, community leaders, places of worship and social workers to form a better understanding of the beneficiary’s living circumstances before approving payments.
Technology, accountability and the future of beneficiary funds
While artificial intelligence presents opportunities to improve efficiencies, tracing capabilities and service delivery, Morata stressed that technology should support human accountability and care, not replace it.
“There are innovative ways technology can help us trace beneficiaries, categorise requests and improve communication, especially in rural or hard-to-reach communities. But at the centre of all of this must still be human judgement and responsibility,” Morata cautioned.
Cybersecurity and data protection were identified as growing concerns for the industry, particularly given the sensitive nature of beneficiary information.
As regulatory expectations continue to evolve through frameworks such as COFI, the FSR Act and increased FSCA oversight, the webinar reinforced that good governance ultimately comes down to doing the right thing consistently.
“Doing the right thing never goes out of fashion,” Morata said. “You should not need legislation to force you to care for people’s assets responsibly.”
Why this work matters
The bottom line for trustees, principal officers and administrators is that beneficiary funds must remain accessible, accountable and connected to the communities they serve.
The conversation has to be about more than governance and compliance. It must be about protecting dignity, supporting vulnerable children, and ensuring that the legacy left behind by retirement fund members translates into real opportunities and confidence for future generations.
For the full discussion and additional insights, watch the webinar here: https://www.youtube.com/watch?v=9FppqqrgU-U
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