Finance minister Tito Mboweni has reportedly backed Cosatu’s plans to use funds from the Public Investment Corporation (PIC) to help fund Eskom.
Speaking in a pre-budget meeting with media, Mboweni said that this consideration should not only be limited to government pensions managed by the PIC, but should also extend to private pensions.
“If we go the pension route – it must be all of us. It can’t (only be) public servant pensions, it must be all pensions,” Mboweni was quoted saying. “I think it is a good idea, it must be encouraged. Other institutions can look at the option.”
Mboweni’s comments come after the Congress of South African Trade Unions (Cosatu), the nation’s biggest labour organisation, reportedly reached an agreement with business on a plan to save Eskom.
Cosatu has proposed the use of civil servant pensions and a state-run unemployment fund to cut Eskom’s debt by about R254 billion, which would then leave the power utility with a sum of around R200 billion to service, which Eskom has previously said it can manage as it currently struggles to cover its daily running costs.
The PIC manages in excess of R2 trillion on behalf of clients that include the Government Employees Pension Fund (GEPF), Unemployment Insurance Fund (UIF), Compensation Commissioners’ Fund (CC) and several others.
While Cosatu supported the idea of using the PIC to help address Eskom’s debt issues, it warned that it would be reckless to allow workers money to be invested without first implementing drastic changes at the power utility.
“Currently, worker retirement savings are captive to unscrupulous assets managers, who would rather deploy large chunks of retirement savings in betting on market movements of some stocks, bonds or currencies (including against the rand),” Cosatu said in a statement.
“In some instances, these assets managers do not exercise the required fiduciary vigilance – which is why there have been numerous incidents of disastrous outcomes, including the recent Steinhoff saga (with public service workers’ money in GEPF through PIC).”