March 2020

11Mar

South Africa. The Eskom Pension and Provident Fund overpays for underperformance at the expense of Eskom employees

The Eskom Pension and Provident Fund (EPPF) is South Africa’s second-largest retirement provider of defined benefits. Most investors are focused on its solvency ratios and metrics of material costs, and less so on operational costs because of the proportion of the assets under management. A few percentage point changes in the operation costs has never been much of a cause for concern. But when operational costs become a significant financial burden, pensions should take notice. The CEO and principal...

March 11, 2020
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04Mar

South Africa. Pension funds shouldn’t be ‘fearful’ of Eskom – Ramaphosa

President Cyril Ramaphosa has given the strongest indication yet that the savings of pension funds will be used to bail out Eskom’s debt obligations. Briefing the South African National Editors’ Forum (Sanef) in Cape Town, Ramaphosa said South Africans "weren’t that good" at saving money and that pension funds were the main sources of money to save Eskom. The national power utility has to repay over R450bn in debt. "You have to go to the source of investments. Where...

March 4, 2020
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03Mar

South Africa. Ramaphosa backs plan to trim public servants wage bill, instead of affecting pensions

The decision to try cutting the government’s runaway wage bill was a better available option in trimming down the state’s spending. This is according to President Cyril Ramaphosa who, in his weekly newsletter, said that the other available option would have had a bigger and negative impact on civil servants and South Africans in general. According to Ramaphosa, the government had two options available in cutting down its spending - renegotiate 2020 salaries increases with public sector unions or...

March 3, 2020
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February 2020

19Feb

South Africa. DA MP calls on Ramaphosa to break away from ANC

DA MP Geordin Hill-Lewis has called on President Cyril Ramaphosa to part with factions in the ANC that were opposed to policy and structural reform, and to instead assemble a progressive coalition to govern South Africa. Hill-Lewis, in the parliamentary debate on Ramaphosa's state of the nation address (SONA), said the president had made so many unwise concessions in his bid to keep the ruling party united behind him that he seemed like a leader in retreat. Hence, he...

February 19, 2020
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13Feb

South Africa. Trade union oppose plans to finance Eskom with pension fund

South African trade union Solidarity announced that it has started a legal process to stop plans to financing Eskom from the Government Employees Pension Fund (GEPF). The union says it has written a letter to the GEPF as well as the Public Investment Corporation (PIC), and it is demanding that the Trustees and the Board of these institutions should not accept the controversial plan to finance Eskom from the Fund. In the letter, Solidarity called the Trustees’ attention to...

February 13, 2020
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05Feb

Controversial plan to use pensions for government funding in South Africa

Labour federation Cosatu met with government, business, community and labour leaders on Monday (3 February) to present its plan to rescue debt-stricken Eskom. Key to this plan is 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...

February 5, 2020
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January 2020

30Jan

South Africa Unions Want Infrastructure Funded by Pensions

The Congress of South African Trade Unions, a key ruling party ally, is pushing senior members of government to consider its proposals to rescue the state’s indebted power utility before next month’s budget. In addition to suggestions it made in a November document that civil servants’ pensions and a state-run unemployment fund be used to cut Eskom Holdings SOC Ltd.’s debt by more than half to 200 billion rand ($14 billion), Cosatu wants the government to consider making it...

January 30, 2020
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December 2019

24Dec

Africa’s Biggest Fund Manager Needs CEO for $150 Billion Assets

South Africa’s main manager of government-worker pensions is facing its second new year in a row without a chief executive officer as the board struggles to identify a suitable custodian of its $150 billion of assets. The state-owned Public Investment Corp. has been without a permanent leader since Daniel Matjila was ousted in November 2018, with two consecutive acting heads running Africa’s biggest fund manager in the meantime. Reuel Khoza, the PIC’s first non-government affiliated chairman, said in July...

December 24, 2019
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17Dec

South Africa Government Pension Returns 2.6% in Fiscal 2019

South Africa’s Government Employees Pension Fund (GEPF) returned 2.6% during the fiscal year ended March 31, down from 8.5% in 2018, but beating its benchmark of 2.3%. That brought its asset value to R1.82 trillion ($122.9 billion), an increase of R17 billion compared to the previous year. The fund attributed the outperformance of its benchmark to improved resource commodity prices, which it said favored the fund’s tactical overweight position in resources relative to the benchmark. The basic...

December 17, 2019
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November 2019

21Nov

South Africa. Battle to recover R42 billion in unclaimed pension money

A campaign to reclaim billions of rands in unclaimed benefits is about to kick into high gear. The Unclaimed Benefits Committee (UBC), representing a group of claimants, and non-profit organisation Open Secrets, are planning to lobby Parliament. “We will also be calling for a boycott of finance companies involved in withholding benefits,” says Thomas Malakotse, a member of the UBC steering committee. “The fund administrators have been making secret profits for decades by charging fees on these unclaimed assets,...

November 21, 2019
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