Hot seat: Finance Minister Malusi Gigaba has been sent a letter of demand by the Public Service Association over concerns about the composition of the Public Investment Corporation board. Picture: REUTERS
Hot seat: Finance Minister Malusi Gigaba has been sent a letter of demand by the Public Service Association over concerns about the composition of the Public Investment Corporation board. Picture: REUTERS

In a move meant to bolster workers’ control over their pensions, the Public Service Association (PSA) is demand-ing information about Public Investment Corporation (PIC) board appointments.

The union has written to Finance Minister Malusi Gigaba demanding that he disclose why he was not considering section 6 (2) of the Public Investment Corporation Act when making board appointments. The section makes provision for the finance minister to consider nominations submitted by the PIC’s depositors, which include Government Employees Pension Fund members.

The letter includes an access to information request for consultations held between Gigaba or his predecessors and the Cabinet when determining who should sit on the PIC board.

Public sector unions including the PSA have been angered by the possibility of their investments being used to bail out state-owned companies. They have vowed to protect workers’ savings and have demanded an undertaking by the government that it will not dip into PIC funds to make up for its shortfall in the fiscus. In 2015, public servants resigned from their posts en masse as fears arose over proposed changes to pensions and provident funds contained in the then Taxation Laws Amendment Bill.

"The PSA requires the minister to issue a clear statement repudiating any such rumours and confirming that there is no intention to utilise funds of the Government Employees Pension Fund which are invested via PIC to assist South African Airways," the letter states.

The Federation of Unions of SA, to which PSA is affiliated, has threatened to pull its workers’ savings from the Government Employees Pension Fund.

The PSA represents 230,000 public servants, which is 12.9% of the Government Employees Pension Fund membership of 1.2-million.

Its demand, which was also sent to Public Service and Administration Minister Faith Muthambi and PIC board chairman Sfiso Buthelezi, contained a threat of court action should Gigaba fail to act on the demands. The PSA said it took the step of a letter of demand, drafted by its attorneys, after Gigaba failed to reply to three letters sent in September and October and which expressed concern over the investment of pension fund monies and the composition of the PIC board.

"It (PSA) is dismayed that you have failed to respond in any way to the concern and proposals addressed in our client’s letters," the letter reads. "This may leave it with little option but to take up its concerns in the Government Employees Pension Fund and to lobby for the fund to terminate its investment mandate to the PIC and make alternative arrangements for the investment of its assets."

mahlakoanat@businesslive.co.za

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