There’s probably very little that’s more demoralizing than working your hardest to sustain yourself and your loved ones, and yet not receiving all the money that is due to you. Are you aware that huge sums of unaccounted-for monies lie in frozen saving, investment and pension funds – for the sole reason that the clients never tracked, documented and/or effectively communicated how much money was due to them, and where their savings were located? Worldwide there are trillions of dollars of unclaimed assets sitting comfortably in the accounts of banks, insurance companies and government agencies due to the inability to locate the owners and their beneficiaries.
In Israel, a comparable situation exists. With employees hopping from company to company, encouraged by insurance agents and companies alike to open up new savings accounts at each stop, the ability the keep track of one’s accounts is increasingly difficult. The problem is compounded for English speakers who don’t always understand the types of policies and their unique characteristics including to whom the money really belongs (in most cases the money is legally theirs and does not belong to the employer). And whereas one fine day you might remember that fund, and contact the company, and receive your funds, what if something, G-d forbid, happens to a person before he remembers? His surviving family will have no idea that any such fund existed, and will never benefit from their loved-one’s hard-earned savings.
Hopefully, this unfortunate and common scenario in Israel has the potential to change shortly. Swiftness – a subsidiary of Ness Technologies – is nearing the completion of the development of an online system (financed by the Treasury) to enable the general population to easily access information regarding all their pension savings accounts across the financial system. All pension funds will be obligated to share all account information thus ensuring that we know exactly where our money is located and empowering us to better manage and control our assets.
But let’s be honest. The government is doing its part in facilitating the public’s information gathering and locating of their assets across the Israeli financial landscape – but is the average Joe or Jane actually going to benefit? In truth, that all depends on Joe and Jane.
The way I see it, there are a number of reasons why many people end up not accessing their total savings plans in Israel. The technical reasons are linguistic and the financial inability to cope. We receive a statement with numbers, terms and words we don’t understand, and file it away, in the hope that the company knows what they’re doing and we will receive what is due to us when we retire. The other issue is the lack of objective financial advice given to those transitioning into retirement, who need to make major decisions about how to access their savings in the most advantageous manner given their individual circumstances.
Isn’t it time we woke up? I’m not for one minute suggesting that the fund managers or insurance companies are out to steal from their clients, however, people need to make decisions that are appropriate for them and not just accept what an agent or a potentially biased company is recommending. And of course this is apart from the myriad errors that are made. Remember the onus is on the client to check for errors.
The funds are obligated to send their clients quarterly statements – and they do, when they can find them. But what if you move, and don’t forward your change of address? They’ll keep sending the statements to the old address, and after a while you might well forget that you ever had a savings fund with that particular company. Hopefully the new system will solve the lost account issue for those who sign up for the system and take the responsibility for finding and tracking their accounts. But we still need to sign up for the system or else all will be for naught and lost accounts may continue to haunt people for years to come.
So what can you do?
If you haven’t yet logged your finances so that you, and your family, know exactly what you have, and where it is located, start now! Take your impetus from the new pension program and work to maximize your knowledge and awareness.
If you did start the process – continue! The more information and history of all your accounts and insurance policies you are tracking, the clearer the picture of your finances will be and the easier it will be for you to plan for the future.
Don’t be overwhelmed by the years gone by when you never tracked and checked. Start with what you have now! Take those statements that you just received and log that information. If you don’t know where to start, go to a professional for help.
Break it down into manageable pieces. Don’t kid yourself that tomorrow/next week/next month you’ll set aside a whole day and get all your finances in order. Chances are that day won’t be happening anytime soon. However, if you make a start, however small, your mindset will be different as you will have made that leap to become proactive.
When you know where your money is and what it is doing, you can also start seeing more clearly what is working best for you. Unless the reason you are working hard is to help the banks and investment funds, isn’t it time you took control of your finances?