Cyril Ramaphosa calls for dialogue on prescribed assets
The president says the matter needs to be discussed with regards to using assets to generate growth, but the DA is opposed to the idea
President Cyril Ramaphosa has called for a national dialogue on the proposal to utilise private and public pension funds for “developmental purposes”.
Enoch Godongwana, the head of the party’s economic transformation sub-committee, recently proposed that the country consider using private and public pension funds to bail out struggling parastatals, and to avoid an International Monetary Fund (IMF) bailout.
Responding to questions from the DA and the EFF in the National Assembly on Thursday, Ramaphosa said the issue of prescribed assets has been raised several times before and the matter needs to be discussed “with the view of saying what can we do to utilise our assets in the country to generate growth”.
Ramaphosa said a portion of the Government Employees Pension Fund (GEPF), which is by far the biggest source of funds for the Public Investment Corporation (PIC), is set aside for development purposes and, in number of cases, “this has worked very well”. SA’s biggest pension fund manages about R1.8-trillion of state workers’ funds, placing most of the money with the PIC, the largest asset manager on the continent.
“We need to have a discussion as a country. We are faced with a situation where our financial resources have been depleted, and quite often pension funds make good returns on infrastructure development projects … let’s have a discussion,” said Ramaphosa.
Prescribed assets will, in effect, compel SA asset managers and pension funds to invest in the country’s bonds and state-owned enterprises (SOEs). SA last had prescribed assets during the apartheid era, which made it compulsory for retirement funds to invest half of all savings in government bonds.
The DA is strongly opposed to the idea.
DA MP and finance spokesperson Geordin Hill-Lewis said the party and trade unions “can and should work together to oppose the spectre of prescribed assets”.
“We have written to all major trade unions in SA to request a meeting to discuss the potential for co-operation in opposing this reckless policy proposal,” said Hill-Lewis.
“Unions have a responsibility to care for the best interests of their members. The ANC’s proposal to rob private pension savings to pay for Eskom debt is clearly harmful to the interests of all hard-working South Africans. Unions, regardless of their political affiliations, should therefore fight the prescription of assets on behalf of their members.”