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Economy: Retirement funds encouraged to invest in ‘real assets’

Publish date: 12 June 2019
Issue Number: 4717
Diary: Legalbrief Today

Retirement funds ‘have a role to play’ in SA’s development, according to newly-appointed Trade & Industry Minister Ebrahim Patel. In the Minister’s view, ‘aside from underpinning equity and debt markets’ they should invest in ‘real assets’. This is noting that government ‘is looking not just to foreign direct investment’ to stimulate economic growth but also – ‘and very strongly’ – to domestic investment, reports Pam Saxby for Legalbrief Policy Watch. Addressing pension fund trustees at a recent Council for Retirement Funds for SA function, Patel called for ‘a longer-term perspective on returns’.

The Minister believes trustees ‘have a responsibility towards … (fund) members to help lift the long-term rate of growth of the South African economy as a key means of realising the pension promise’. ‘A sluggish economy impacts directly on the performance of your overall portfolio,’ Patel said. Against that backdrop, he invited the council to ‘engage with government after the State of the Nation Address’ to learn more about ‘the new administration’s vision’ for promoting sustainable development and interventions apparently being planned to that end.

In January, an ANC election manifesto undertaking to ‘investigate the introduction of prescribed assets on financial institutions’ funds to unlock resources for investments in social and economic development’ (BusinessTech) reportedly sparked threats of a Constitutional Court challenge (Business Day).

Follow Pam Saxby on Twitter (@SaxbyPam)