A recent interview with ANC economic transformation head Enoch Godongwana, broadcast by Carte Blanche, has left many in a spin regarding the proposed prescription of pension fund investments into development projects. In the interview, Godongwana suggested that a decision by Standard Bank and Nedbank to halt funding for coal projects needed to be looked at in context, this being that banks do not determine economic policy. So, if the “real” policy makers find that coal projects offer material benefits for the economy as “developmental projects”, a legislated position in favour of prescription would require a change in the stance the banks have taken. A policy of prescribed asset investments would see a regulatory obligation on asset managers to invest a portion of the retirement funds they manage into the said development projects. The focus, therefore, on coal is a red herring in context of the asset prescription debate. Regulation 28 of the Pension Funds Act is a regulatory framew...

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