DA attacks asset managers who support prescribed assets
The ANC supports investigating prescribed assets, but Geordin Hill-Lewis criticised what he said is ‘the sickening sycophancy of some in the asset management industry’
Certain players in the asset management industry were lambasted by the DA in the National Assembly on Tuesday for their support of the ANC’s policy on prescribed assets.
A debate on the policy took place at the instigation of DA MP Geordin Hill-Lewis, who criticised what he said was “the sickening sycophancy of some in the asset management industry”.
“Now we have the grotesque spectacle of asset prescription proudly endorsed by Colin Coleman of Goldman Sachs, Magda Wierzycka of Sygnia Asset Management, and Wayne McCurrie from FNB Wealth and Investments,” Hill-Lewis said.
His view is that asset prescription is inimical to efficient capital allocation, and is clearly not in the interests of the clients of these asset managers. “These asset managers have shown they are prepared to accept almost any outrage, so long as it is presented in a ‘new dawn’ wrapper. Here, again, we have the alliance of big state, big unions, and big business working together, with no regard for the best interests of South Africans”.
Prescribed assets constitute “pension theft” and will result in lower pensions, he added.
The ANC indicated in its 2019 election manifesto that it would investigate the introduction of prescribed assets — which would require pension funds to invest a given percentage of their funds in government bonds or state-owned enterprises (SOEs). Hill-Lewis said President Cyril Ramaphosa had indicated in the National Assembly that this policy would be forthcoming.
“This government is proposing to steal from the pensions of hard-working South Africans to pay for their mismanagement,” he said. “If the ANC does go ahead with this mad idea, we will table private members legislation to allow South Africans to withdraw their pensions without having to resign first. And our legislation will allow them to opt out of compulsory pension contributions. If we don’t do this, you will see thousands of workers resigning from their jobs to save their pensions.”
ANC MP Phoebe Abraham spoke of the benefits the prescribed asset policy adopted by the apartheid regime had on economic growth and the development of SOEs, which have not only provided jobs but employment benefits as well. She insisted that the ANC government is not a reckless government but as the economy is not growing, solutions have to be found.
Other ANC MPs emphasised that prescribed assets would help grow the economy, which has not been growing at the level required to address poverty, inequality and unemployment. Pensioners are not only worried about returns but also about jobs for their children. All the resources of the country have to be mobilised to grow the economy, they said.
EFF chief whip Floyd Shivambu accused Hill-Lewis of “sensationalism” and “raising false alarms to cause panic”. He noted that the Public Investment Corporation (PIC), which acts as investment manager for the Government Employees Pension Fund (GEPF), is already exposed to both government and parastatal bonds and invested in developmental projects. The biggest risk for the PIC is its listed assets, for example the losses it suffered from its Steinhoff investment. There is nothing wrong with prescribed assets, Shivambu said, if the policy is implemented within the correct developmental mandate and strategy.
IFP MP Elphas Buthelezi, Freedom Front Plus MP Wouter Wessels and African Christian Democratic Party MP Steve Swart said their parties did not support the policy of prescribed assets either.
Other MPs emphasised the need for growth, rather than introducing prescribed assets.