LETTER: State abuses pension funds

There is a new form of state capture that thrives and is freely accepted, this while government leaders supposedly commit themselves to oppose any form of state capture.

The giant public service pension fund, amounting to R2.3-trillion, is managed by the Public Investment Corporation (PIC) on behalf of the Government Employees Pension Fund (GEPF).

The GEPF is not regulated and protected by the Pension Funds Act like other private retirement funds. It is not allowed to use an investment broker other than the PIC.

The PIC has already shifted 5% of its investments to unlisted companies. It is a poor economic decision because losses skyrocket. Some of the unlisted companies are bankrupt or have had to be liquidated.

However, the PIC has decided to expand its investments in unlisted companies to 35%. The justification for it is that it pursues essential social goals.

The state as employer is essentially in control of the PIC’s assets. Investments are captured under the banner of essential social welfare for citizens. Thus the government abuses pension funds to try to save its faltering social wealth creation programme.

This is done with pensioners’ money and without a hitch. Pensioners don’t burn tyres or block roads over it. They seem to accept it with resignation.

Joe Kleinhans 
Annlin, Pretoria

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