October 2019

09Oct

South Africa. The impact of ethical investment by pension funds

The core functions of a pension fund are to provide its beneficiaries with good enough returns for them to live on – and a good enough world to retire into. It makes little sense to simply strive to generate financial returns for pensioners, if the investments that provide those returns are reckless, bad for the planet or perpetuate social inequality and inequity. It is thus common sense that responsible investing – which all investing should actually be – must...

October 9, 2019
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07Oct

South Africa. Prescribed assets would upset the rationale for pension funds

One of the main criticisms of prescribed assets is that forcing pension funds into these investments would hurt individual savers. Besides the market distortions that prescribed assets would create, everyone understands that they would deliver below market returns. Under South Africa’s previous dalliance with prescribed assets, this impact was primarily felt by employers. This is because pension funds back then were run in a different way – they were all based on defined benefits. This meant each member did...

October 7, 2019
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03Oct

Africa’s Biggest Fund Manager Seeks to Salvage Soiled Reputation

The image of Africa’s biggest fund manager has been damaged by allegations of misconduct and breaches of corporate governance and the institution must now strive to preserve what’s left of its reputation, its interim chairman Reuel Khoza said. The Public Investment Corporation, which oversees 2.13 trillion rand ($139 billion) of mainly South African government worker pensions, has been the subject of a commission of inquiry. That’s involved months of public testimony into allegations of political interference and questionable investment...

October 3, 2019
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September 2019

18Sep

Investors Urge South Africa to Leave Their $163 Billion Savings

South Africa’s 2.4 trillion rand ($163 billion) savings industry has a request for the ruling party: stop threatening to dictate where funds must invest and get going on projects that pensions can help finance. “You can prescribe, but nothing will happen unless you have proper projects,” Leon Campher, the chief executive officer of the Association for Savings and Investment South Africa, an industry body of fund managers and insurers, said in an interview in Johannesburg. “The savings industry would...

September 18, 2019
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11Sep

Government’s plan to go after pension funds could financially ruin South Africans

Analysts and opposition parties have warned against government’s plans to force pension funds to invest in bonds issued by government. In August, president Cyril Ramaphosa said that South Africa should investigate using worker pensions to finance development and infrastructure projects. “We need to discuss this matter (prescribed assets) and we need to discuss it with a view to actually saying what is it we can do to utilise the various resources in our country to generate growth in a...

September 11, 2019
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05Sep

South Africa. How SA Can Create a Safe and Sustainable Environment for Retirement

Socially responsible investing is a topic that still does not get the necessary attention in the retirement fund industry. This is despite the fact that Boards of Trustees and Management Committees of retirement funds have a clear fiduciary duty in this regard. Corporate failures related to a lack of proper governance have destroyed close to R800 billion in value for retirement fund members in recent times. Uncertainties related to government policies such as prescribed assets have become an additional...

September 5, 2019
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02Sep

South Africa: MPs to Fight Back Over Proposed Cut to Parliament Benefits – Report

High-earning Members of Parliament are preparing to resist a move over the trimming of some of their benefits, a Sunday report said. According to the Sunday Times, Parliament is set to review its benefits scheme after it will spend an extra R111m in "loss of office" gratuities this year, to pay 159 MPs who didn't return to their seats after the elections. Those who didn't make it to Parliament are entitled to a once-off gratuity of four months' salary...

September 2, 2019
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August 2019

26Aug

South Africa Pensioners Oppose Prescribed Assets Plan

South Africa’s intentions to tap state workers’ pension funds to revive a struggling economy would be strongly opposed, the Sunday Times reports, citing a major trade group on pensions. The state workers’ pension funds lobby group doesn’t trust government investing pension funds to bail out struggling state-owned companies such as utility Eskom Holdings SOC Ltd., said Adamus Stemmet, spokesman for the Association of Monitoring and Advocacy of Government Pensions. The investments wouldn’t yield positive returns, Stemmet told the weekly....

August 26, 2019
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23Aug

South Africa’s Ramaphosa calls for discussion on utilising pension funds for projects

South Africa should discuss using worker pension funds to finance development and infrastructure projects, a proposal that has the backing of the country’s largest labour federation, President Cyril Ramaphosa said on Thursday. Read also South Africa should look to pensions instead of an IMF bailout: ANC In its 2019 poll manifesto ahead of the May general election, the ruling African National Congress (ANC) mentioned investigating prescribed assets - where the government authorises the investment of retirement savings in certain developmental...

August 23, 2019
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20Aug

South Africa. Prescribed assets: What government could do with your retirement savings

The ANC’s economic policy head said the party is investigating using prescribed assets to avoid an IMF bailout. Prescribed assets will force SA asset managers and pension funds to invest in the country’s bonds and state-owned-enterprises. The last time South Africa had prescribed assets, the apartheid regime forced retirement funds to invest half of all savings in government bonds. ANC economic policy head Enoch Godongwana made headlines over the weekend when he said the party is investigating the use...

August 20, 2019
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