According to document, ANC is pushing to increase access to South Africans’ savings to fund long-term infrastructure and capital projects
THE ANC has revealed that it was in talks with the pension fund industry and the National Treasury over its plans to have pensions bankroll the government’s ambitious infrastructure programme.
Enoch Godongwana, the chairperson of the subcommittee on economic transformation, said the governing party was arguing for a re-look into regulation 28 of the Pension Funds Act, which states that pension funds have a fiduciary duty to act in the best interest of its members whose benefits depend on the responsible management of its assets.
“There is no reason for pension funds not to invest in the infrastructure programme instead of using asset managers which increases the costs,” Godongwana said.
Speaking at the launch of the ANC’s discussion document titled “Reconstruction, Growth and Transformation: Building a New, Inclusive Economy”, Godongwana said the country has an infrastructure programme that has to be developed.
According to the document, the ANC will push for the government to amend the regulation in order to increase the access of South Africans’ savings to fund long-term infrastructure and capital projects.
The ANC proposes that a solution be found for Eskom’s R450 billion debt problem including the possibility of pension funds being mobilised to take over some of the power utility’s restructured assets.
Godongwana said the plan would enable cheaper access to finance for development and added that Covid-19 has given Eskom some room to undertake maintenance work.
He said the global pandemic had revealed issues in some South African communities, where residents cannot observe normal protocols such as social distancing due to shortage of housing, water and sanitation.
“It is our submission that South Africa and other African countries should collaborate on health-care issues to reduce dependency on other countries. It’s an important point we are putting across for consideration,” said Godongwana.
He added that a key focus of the post-Covid-19 period should be development in underprivileged areas.
The plan will also see use the of public-private partnerships being expanded.
“The district development model should be expanded to improve service delivery and infrastructure expansion in both rural and urban areas. It is through proper co-ordination that service delivery will be improved and new special forms in transport will be created,” Godongwana explained.
The governing party’s plans follow the launch of the Public Servants Association’s (PSA’s) campaign to stop the use of its 250 000 members’ pension fund to bail out Eskom.
The union has also threatened legal action should the Government Employees Pension Fund (GEPF) allow the Public Investment Corporation (PIC) to use R200 billion to bail out Eskom.
“The PSA is of the opinion that a bailout to a struggling state-owned entity will have a detrimental impact on the GEPF and its members. Should the PIC consider such a request, it will be an irrational and irresponsible gamble with government employees’ pension money,” the union complained.
According to the PSA, the proposed investment in Eskom without following a consultative process with relevant stakeholders raised serious concerns regarding the manner in which the PIC executed its mandate.
It urged all government employees to support the petition.