{"id":756959,"date":"2024-03-03T06:59:00","date_gmt":"2024-03-03T04:59:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=756959"},"modified":"2024-03-03T08:06:17","modified_gmt":"2024-03-03T06:06:17","slug":"warnings-for-pensions-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/756959\/warnings-for-pensions-in-south-africa\/","title":{"rendered":"Warnings for pensions in South Africa"},"content":{"rendered":"\n<p>Asset managers across South Africa have criticised the ANC&#8217;s plan to introduce prescribed assets in their investments. <\/p>\n\n\n\n<p>In its 2024 general election manifesto, the ANC said it would direct financial institutions through prescribed assets to invest funds in public projects. <\/p>\n\n\n\n<p>Prescribed assets, which have been touted in several previous ANC manifestos, may require retirement funds to invest a portion of their funds in government-approved instruments, with the aim of &#8220;unlocking&#8221; funds for infrastructure and social development projects. <\/p>\n\n\n\n<p>This would need an amendment to Regulation 28 of the Pension Fund Act to come into effect. <\/p>\n\n\n\n<p>Speaking with the <a href=\"https:\/\/www.timeslive.co.za\/sunday-times\/business\/2024-03-03-outcry-over-ancs-prescribed-assets-call\/\" target=\"_blank\" rel=\"noreferrer noopener\">Business Times<\/a>, Stanlib CEO Derrick Msibi said that using prescribed assets as a solution to the nation&#8217;s infrastructure woes is misinterpreted, arguing that while current investment frameworks allow asset managers to invest in such sectors, policy uncertainty results in major obstacles for mobilising the necessary capital. <\/p>\n\n\n\n<p>Shane Watkins, CIO of All Weather Capital, said that when investment drivers are driven by legislation, the implication is that the return will be lower or risk will be higher. <\/p>\n\n\n\n<p>\u201cWhenever you need to compel an investment by legislation, the implication is that the returns will be lower, or the risk is higher.\u201d<\/p>\n\n\n\n<p>Sygnia\u2019s CEO, <a href=\"https:\/\/businesstech.co.za\/news\/government\/755361\/plans-to-grab-retirement-savings-to-fund-government-projects-in-south-africa\/\" target=\"_blank\" rel=\"noreferrer noopener\">Magda Wierzycka<\/a>,&nbsp;also criticised&nbsp;the ANC&#8217;s plan to use retirement savings for government projects.<\/p>\n\n\n\n<p>\u201cFirst, they rob South Africans through taxes. Then, by mismanagement of the economy, the rand collapsed. Now it\u2019s a raid on our retirement savings,\u201d she said.<\/p>\n\n\n\n<p>She noted that South African asset managers already hold over 20% of government bonds, with question marks over what percentage would be enough, <\/p>\n\n\n\n<p>She also previously expressed concern that the prescribed assets could force capital away from major corporations that create jobs and contribute to the economy to fund bankrupt SOEs. <\/p>\n\n\n\n<p>Speaking on the <a href=\"https:\/\/www.youtube.com\/watch?v=-KGUeC5EvAA\" target=\"_blank\" rel=\"noreferrer noopener\">PSG Think Big Series<\/a>, National Treasury Director General Duncan Pieterse said that recent reforms introduced for infrastructure aim at facilitating private sector investment into infrastructure without the need for prescription.  <\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-wp-embed is-provider-businesstech wp-block-embed-businesstech\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"wp-embedded-content\" data-secret=\"E8gY3n1Xfu\"><a href=\"https:\/\/businesstech.co.za\/news\/budget-speech\/753839\/private-sector-to-the-rescue\/\">Private sector to the rescue<\/a><\/blockquote><iframe loading=\"lazy\" class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; clip: rect(1px, 1px, 1px, 1px);\" title=\"&#8220;Private sector to the rescue&#8221; &#8212; BusinessTech\" src=\"https:\/\/businesstech.co.za\/news\/budget-speech\/753839\/private-sector-to-the-rescue\/embed\/#?secret=DXcPRv1itF#?secret=E8gY3n1Xfu\" data-secret=\"E8gY3n1Xfu\" width=\"500\" height=\"282\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe>\n<\/div><\/figure>\n\n\n\n<p class=\"has-medium-font-size\"><strong>Overreaction <\/strong><\/p>\n\n\n\n<p>However, Zuko Godlimpi, deputy chair of the ANC\u2019s economic policy formulation subcommittee, said the reaction to the prescribed asset proposal was alarmist. <\/p>\n\n\n\n<p>\u201cThe reaction so far has been \u2018Oh no, they are raiding our pensions; they want us to buy government bonds\u2019. The manifesto is not predicated on a lunatic misunderstanding of how markets and the economy function,&#8221; Godlimpi said. <\/p>\n\n\n\n<p>He said that the ANC is trying to fix an anomaly where most private retirement fund assets are invested in the JSE&#8217;s top 100 listed firms, meaning that most companies outside the top 100 do not have as much access to the country&#8217;s investment and savings. <\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Read<\/strong>: <a href=\"https:\/\/businesstech.co.za\/news\/lifestyle\/756659\/south-africa-is-home-to-the-most-polluted-place-on-earth-with-health-risks-for-millions\/\" target=\"_blank\" rel=\"noreferrer noopener\">South Africa is home to the most polluted place on earth \u2013 with health risks for millions<\/a><\/p>\n\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A new proposal from South Africa&#8217;s ruling party has received widespread condemnation from asset managers.<\/p>\n","protected":false},"author":95,"featured_media":672267,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[19503,26,1482,11885],"class_list":["post-756959","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-all-weather-capital","tag-headline","tag-stanlib","tag-sygnia"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/756959","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=756959"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/756959\/revisions"}],"predecessor-version":[{"id":756987,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/756959\/revisions\/756987"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/672267"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=756959"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=756959"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=756959"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}