Transparency paramount at the PIC
Publish date: 18 October 2017
Issue Number: 209
Diary: Legalbrief Workplace
Category: Corruption
The DA is proposing draft legislation that will strengthen transparency and accountability at the Public Investment Corporation (PIC), which is responsible for managing government employees’ pension funds. David Maynier, DA spokesperson on finance, is quoted in Fin24 as saying that he has drafted a private member’s Bill to amend the current Public Investment Corporation Act of 2004 to, among other things: create a new process for appointing the PIC chairperson; provide for a different structure of the PIC board; and impose a duty on the PIC to disclose all investments. Maynier also wants the PIC to be legally bound to disclose all its listed and unlisted investments on an annual basis on its website and tabling it before Parliament. In addition, the new Bill should compel the PIC to make known in its annual report a total list of requests made to the Finance Minister for any significant transactions.
Trade union federations have unanimously said they will resist attempts by government to use workers’ hard-earned pension money to bail out ‘bankrupt’ state-owned enterprises, like SAA. Fin24 reports that trade union federation Cosatu, the SA Federation of Trade Unions and the Federation of Unions of SA made presentations to members of the standing committee on finance this week, following a briefing about the annual reports of the PIC and the Government Employees Pension Fund earlier. Trade union federations were also critical of Finance Minister Malusi Gigaba's move to launch a forensic audit of the PIC, questioning his motives. Gigaba on 11 October announced a forensic audit of all PIC investments for the past two years. In a letter written to Deputy Finance Minister Sfiso Buthelezi, the chair of the PIC, Gigaba requested that the audit be carried out by a ‘reputable independent forensic company’. Members of the standing committee also questioned Gigaba's intentions.
Cosatu said the Government Employees' Pension Fund and the PIC belong to workers and it is their hard-earned pensions, unemployment insurance and compensation fund. Cosatu said: ‘This money is there to provide for them during retirement, unemployment and injury. Cosatu will continue to fight to ensure that no looters will be allowed to touch the workers' PIC. We will also continue to ensure that the GEPF remains with the PIC as it has proven its ability to grow workers' pensions and funds as well as to create jobs and grow the economy. Cosatu will make proposals to Parliament to further strengthen the PIC's transparency and accountability to the GEPF and Parliament on behalf of workers.’
Deputy President Cyril Ramaphosa’s comments that the PIC should be defended have angered Gigaba, reports The Star. This emerged as Gigaba demanded that embattled PIC boss Dr Dan Matjila and the board reveal the entity’s investments and the people it has funded, in what is believed to be a fresh bid to oust Matjila. The report says the demand is contained in an explosive letter that Gigaba sent to Buthelezi. However, National Treasury spokesperson Mayihlome Tshwete rubbished the contention that the Minister’s letter sought to target Matjila, saying Gigaba had sought to bring the PIC saga to its finality.
Concerns that politicians view the PIC as a cash cow will, meanwhile, loom large over discussions to establish an overarching pension fund for SA. Fin24 reports that the new fund wants to consolidate the more than 5 000 public and private retirement funds into one giant mandatory institution, possibly under government control – the National Social Security Fund (NSSF) will centralise current retirement funds estimated to be worth R3trn. The report says that while aiming to force South Africans to save for retirement, as well as cross-subsidise lower-income earners, it also plans to cut administrative costs and streamline all public and private retirement funds as well as the Unemployment Insurance Fund into a single integrated structure. All income earners will be required to pay 12% of their annual salary to the NSSF, creating the multitrillion-rand fund but labour and investment analysts have warned that unless the centralised retirement fund has good governance structures in place, it could potentially be used to bail out failing state-owned enterprises. The new fund’s negotiations are taking place at the National Economic Development and Labour Council over the next few months, the report says.
