SAA bailout: GEPF response to our concerns disappointing - PSA

Ivan Fredericks says Fund seems to have little control over PIC's investment decisions

PSA not satisfied with GEPF response on PIC investments

The Public Servants Association (PSA), received a disappointing response from the Government Employees Pension Fund (GEPF) about the state of workers’ pension fund following media reports that government is considering using GEPF funding, invested via the Public Investment Corporation (PIC), to recapitalise the non-profitable South African Airways (SAA).

The PSA raised its concerns and those of its members in correspondence with the Chairperson of the GEPF, seeking that ongoing rumors be repudiated and that confirmation is given that the Board is not considering or dealing with a request to assist the SAA financially.

In response, the GEPF indicated that a statement was already issued on 25 May 2017, confirming that such a “bail-out” was not under consideration by the Fund and that its position on the matter has not changed. The GEPF indicated that the Fund is not invested in SAA and, to date has not been approached to do so. According to the GEPF, any approach for investments to the PIC would be in the “ordinary course of carrying out its mandate to invest on behalf of clients of which the GEPF is by far the largest”.

The Chairperson further stated that, “the GEPF has confidence in the PIC’s ability to prudently invest funds on its behalf in terms of the agreed investment mandate, and constantly monitors and evaluates the PIC’s performance in accordance with its investment policy and mandates. Where investments exceed predetermined limits and/or have specific characteristics, the Fund will require the PIC to seek special authority from them.” 

“The limits and/or characteristics were not stated. It is clear from the response that the GEPF does not have much control over the type of investments that the PIC chooses and therefore cannot provide reassurance about members’ investments,” said PSA General Manager, Ivan Fredericks.

“The PSA also wrote to the Minister of Finance, Malusi Gigaba, asking him to clear the rumours to avert panic. The PSA still await a response from the Minister on the same concerns. The Union reserves its rights while considering options to stop any public servants’ pension fund money being wasted into SAA,” said Mr Fredericks.

Statement issued by Ivan Fredericks, Public Servants Association General Manager, 22 September 2017