Willem Beeby, Manager Growth and Innovation at TEBA

Most of us in the retirement and employee benefits industry have encountered Marketing theory in some form—often tucked into a module or two of our studies. For some, it was simply theory to get through; for others, like myself, the strategic and integrated nature of Marketing left a lasting impression. One principle that continues to resonate is the critical importance of understanding your customer—through detailed analysis and segmentation—as the foundation for shaping every element of a product or service offering. This includes pricing, distribution, and even the design of the offering itself.

In a previous contribution to EBnet, I highlighted the risks of a “one-size-fits-all” tracing approach, especially for lower-income members. Without thoughtful segmentation, we risk excluding the most vulnerable—those who are already on the periphery of formal financial systems.

This is particularly relevant for umbrella funds, which tend to serve a wide and diverse membership base. Their appeal—driven by cost-efficiencies, economies of scale, and consistent service offerings—makes them attractive to employers and boards. However, the diversity within these funds also demands a more nuanced approach, especially when it comes to tracing unclaimed benefits or lost members.

Let’s take a closer look at the two dominant member segments typically found in umbrella funds: Blue-Collar and White-Collar members.

Understanding Blue-Collar Members

This segment often includes:

• Lower income earners (lower LSM groups) and lower fund values
• Higher physical mobility, often relocating for job opportunities (especially in urbanisation contexts)
• Preference for rental accommodation, limiting long-term asset trails
• Employment in semi-skilled industries
• Limited and inconsistent (multiple members of a household) engagement with credit, resulting in sparse digital and financial data trails
• Support of extended family units, increasing financial vulnerability
• Higher exposure to economic shocks like job loss or unexpected expenses

Understanding White-Collar Members

This group generally exhibits:

• Higher income levels
• Careers tied to stable urban employment hubs
• Investment in fixed assets like property, making them easier to locate
• Greater financial literacy and formal engagement with financial planners or service providers
• Larger and more accessible digital footprints

Where Traditional Tracing Falls Short

Desktop tracing—relying on data from credit bureaus, the Department of Home Affairs, the Deeds Office, and other public databases—has become the industry standard. It’s cost-effective, scalable, and driven by increasingly efficient systems. Many tracing agents now offer tiered services, with more complex cases priced at a premium. There’s also a growing trend of “recycling” data between tracers based on skillsets and capabilities, further streamlining the process.

However, this model inherently favours members with richer digital profiles—typically white-collar workers. Blue-collar members, due to their lower financial visibility and mobility, are often harder to trace using standard desktop methods. And given the pressures to reduce costs, these more complex cases are either deprioritised or priced out of the market—compounding inequality and undermining the purpose of the industry to create, preserve and pass on wealth inter-generationally.

What Should Funds and Trustees Be Doing?

This is a call to action for trustees, fund administrators, and boards: tracing is not just a technical exercise—it has a social impact. When a tracing strategy is developed without taking member segmentation into account, the result is a systemic disadvantage for the most vulnerable groups in our retirement system.

Key considerations going forward should include:

• Conducting a detailed analysis of your fund’s member base
• Working with multiple tracing providers who bring diverse methods and capabilities
• Recognising that the cheapest approach is not always the most equitable or effective
• Embedding social impact as a key metric in evaluating tracing outcomes
• Embedding social impact in tracing as a key metric in the sustainability framework of funds

By aligning tracing strategies with member realities, we can make meaningful strides in improving benefit preservation, delivering on our promises, and restoring dignity to all members—regardless of their income or employment category.

ENDS