Johannesburg — A RETIREMENT fund yesterday suggested legislation was needed to compel pension funds to invest unclaimed pension fund surpluses in job-creating projects and help the government deal with SA's worsening unemployment crisis.

Metropolitan Life said figures released by the Financial Services Board three years ago showed local pension funds had about R35bn in distributable surpluses.

"If 10% of this ... remains unclaimed, then approximately R3 ,5bn would be available for job- creation projects," Metropolitan Life retirement fund services executive Erich Kröhnert said.

He said eight years after the Pension Surplus Apportionment legislation came into effect, a substantial sum of unclaimed surplus proceeds had not yet been paid to the intended beneficiaries. Only asset managers and tracing agents gained from surpluses.

"We believe that the board, as a matter of urgency, should begin drafting regulations that require pension funds to invest unclaimed surplus proceeds in socially responsible investments -- where the money could be used in community empowerment projects until claimed by former members," Kröhnert said.

Employment in the mining and agricultural sectors declined 4,8% and 14,9% respectively in the year to September.

Even if SA managed to recover from recession in the first quarter of next year, it would take some time to create job opportunities to replace jobs that have been lost.

"While formal jobs can be created, investment in socially responsible investments also creates opportunities for entrepreneurs," Kröhnert said.