Retirement funds will have to invest in upskilling trustees to empower them to navigate the complex world of infrastructure investing opened up by the gazetting of the amendments to Regulation 28 of the Pensions Fund Act, says Andrew Davison, chair of the Investments Committee of the Actuarial Society of South Africa (ASSA).

The new Regulation 28 investment limits allow retirement funds to invest up to 45% of assets in South African infrastructure projects, effective from the beginning of January 2023.

Infrastructure assets are defined as physical assets or technology constructed, developed or maintained with the main goal of providing services or facilities for the benefit of South Africa’s people, business and economy.

Davison welcomed the introduction of the specific infrastructure investment limits, aimed at encouraging retirement funds to invest in infrastructure projects.

He said that the new 45% allowance change places an additional duty on retirement fund trustees to pick well-defined infrastructure projects that contribute to building the country while also providing the returns members need on their savings over the long term without excessive levels of risk.

“Trustees need to consider the new limit in the context of each retirement fund’s benefit objectives. The reality is that infrastructure investments are accessed mostly via private equity and other unlisted instruments and come with significant risk.”

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