South Africa pensioners reportedly oppose prescribed assets plan

South Africa’s intentions to tap state workers’ pension funds to revive a struggling economy would be strongly opposed, the Sunday Times reports, citing a major trade group on pensions.

Read: Ramaphosa calls for discussion on utilising pension funds for projects

The state workers’ pension funds lobby group doesn’t trust government investing pension funds to bail out struggling state-owned companies such as utility Eskom, said Adamus Stemmet, spokesman for the Association of Monitoring and Advocacy of Government Pensions. The investments wouldn’t yield positive returns, Stemmet told the weekly.

President Cyril Ramaphosa told Parliament on August 22 the nation must debate the use of prescribed assets to rejuvenate investment and boost tepid economic growth. Continuing to invest pension funds in the debt-laden state-owned utility Eskom, for example, would result in further losses, Stemmet said.

“If we could have trusted the government, this might have been an option,” Stemmet said. “But we cannot trust this government; there would be a negative return on any money invested in Eskom or any other state-owned enterprise.”

The Public Investment Corporation, which manages about R2.2 trillion on behalf of state workers, is under pressure to adopt a mandate that includes economic growth rather than focus purely on financial returns.

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