WORLDVIEW: What to do if the ANC destroys pensions with prescribed assets
Government support for a prescribed assets rule for pension funds seems to be growing. Investors fear new rules that would force retirement funds to invest in government debt, which would effectively mean bailing out disasters like Eskom using your retirement savings.
The idea is that the government would add to existing rules that, for example, limit retirement funds' offshore investments to 30% of total assets. It could mandate that funds must invest, say, 40% in government assets, including state-owned enterprise (SOE) debt.
From a certain perspective, this would be great for the government. It would enable our leaders to plug the ugly, trillion-rand holes left in state finances by corruption and mismanagement using the R4.4trn pension pot South African savers have accumulated. It would help the state avoid the brutal necessity of an IMF bailout. It may even make it possible for the government to deal with some of the country's crumbling infrastructure β assuming there are enough honest civil servants around to manage some useful projects.
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