Open letter to Tito: prescribed assets; are you SERIOUS?

The Association for the Monitoring and Advocacy of Government Pensions, (AMAGP), has once again outdone itself with impeccable logic in a polite protest letter. This time the appeal is to Finance Minister Tito Mboweni, asking how the new prescribed assets policy will impact on government pensioners – the biggest block of retirees and prospective retirees in the country, not to mention on the rest of us. It’s a simple question backed by a senior policy advisor who got the heads of many luminaries nodding at a recent investment seminar of the Actuarial Society of South Africa. Gill Raine outlined the disastrous effect such a policy had on pensioners and the economy in the past and wondered aloud whether the government had learnt anything from past mistakes. It brings the issue front and centre stage, making it imperative that parliament’s Standing Committee on Finance rescue the reputations of itself and other parliamentary committees whose accountability role has been questioned by none other than Judge Raymond Zondo, heading the Commission of Inquiry into State Capture. His colleague probing alleged improprieties at the PIC, Judge Lex Mpati, can’t be far behind in wondering how much chaos could have been avoided had parliament conducted its oversight role with more diligence. None so blind as those who will not see, it seems. – Chris Bateman

Is the government really serious with their new policy about prescribed assets?

Dear Honourable Minister,

For some unknown reason the government is hell bent in its efforts to repeat the mistakes of its predecessors, even after the same mistakes were previously realised and discontinued. This is exactly what the ANC Government is now doing with their policy of prescribed assets as announced in the ANC’s election manifesto.

We at AMAGP truly hoped that this was only an election gimmick, but now it appears as if we were mistaken because on 10 June 2019 the Minister of Trade and Industry, Mr Ebrahim Patel repeated the government’s intention in this regard. Perhaps he was not aware of the failure of this same policy in the past.

The Minister would be well advised to obtain the speech by Gill Raine, senior policy advisor at the Savings and Investment South Africa (Asisa) delivered to the Actuarial Society’ investment seminar in Cape Town on 13 June 2019.

In this speech she clearly illustrated the disastrous impact this policy had in the past, not only on pension funds but also on the South African economy.

As it is impossible to summarise the speech here, we will save the Minister’s time by enclosing only one of the many excellent newspaper reports which appeared in the newspapers.

We certainly also hope that the Honourable Minister will take into account the many knocks of billions that the Government Employees Pension Fund (GEPF) took on the chin as revealed recently. You and other parliamentarians no doubt are by this time well aware that the huge losses were due to the actions of the now disgraced government controlled asset manager, the Public Investment Corporation.

Minister, you are surely also aware that the GEPF owns almost 50% of the combined assets of pension funds in the RSA, making it the largest pension fund in the country. We are therefore also sure that you no doubt know that any losses incurred by the Fund due to the government’s policy will eventually be for the account of the taxpayer.

We at the AMAGP are anxious to learn the views of the Minister of Finance and that of the related parliamentary Standing Committee on Finance regarding this disastrous route the ANC government is taking with its proposed above-mentioned policy.

  • Antonie Visser, chairman, AMAGP.