# Prescribed assets are an apartheid-era policy that’s blatant theft of pensions – MPs

- Link: https://dearsouthafrica.co.za/2019/11/21/prescribed-assets-are-an-apartheid-era-policy-thats-blatant-theft-of-pensions-mps/
- Published: 2019-11-21T12:49:25+02:00
- Author: dearSA

![](https://cdn.dearsouthafrica.co.za/wp-content/uploads/2019/11/20191219/Screenshot-
2019-11-21T124823.365.png "Screenshot - 2019-11-21T124823.365")

The state’s proposal to force pension funds to invest in bonds issued by government
and state-owned enterprises, like Eskom, is effectively theft, Parliament heard.

The National Assembly on Tuesday debated the proposal to investigate the policy 
of prescribing assets, with most opposition parties expressing their disapproval.

The prescription of assets refers to a policy where the state obliges institutions
such as pension funds and insurance companies to invest a part of their funds in
state institutions or bonds. The apartheid government had maintained the policy 
for 33 years (between 1956 and 1989).

The DA, which called the debate, started off proceedings with MP Geordin Hill-Lewis,
who claimed that instead of fixing SOEs government is opting for a policy from the
apartheid regime.

“The ANC has resorted to copying policies of a failing apartheid government. Some
may call it moral and political bankruptcy,” Hill-Lewis said.

**Pension theft**

He warned that the policy would leave South Africans with smaller pensions when 
they retire.

“It is pension theft,” he said. “This government is proposing to steal pensions 
of hardworking South Africans to pay for their mismanagement.

“Stealing from people’s future pensions is still theft and should be fought by every
South African who has diligently saved for their retirement,” he told the National
Assembly.

In response, ANC MP Phoebe Abraham defended the policy proposal. “The ANC is not
a reckless government. We are a caring government,” she said.

Abraham went on to explain the ANC’s reasoning for considering the policy. With 
the economy being under strain the governing party is coming up with solutions and
wants to support the president’s “exploratory direction”, she said.

Abraham recalled how the policy was used by the apartheid government to stimulate
economic growth and while the white minority benefited from it, the majority of 
the oppressed remained “uncatered” for.

She echoed a previous statement by President Cyril Ramaphosa that the ruling party
is pursuing policies that will advance the interests of South Africans.

ANC MP Gijman Skosana also defended the ruling party for taking the responsibility
to lead and bringing an intervention to address the poverty, inequality and unemployment
challenges in the country.

He slammed the DA for only being concerned about the quality of return from the 
pension funds and not growing the economy and creating jobs – which is what the 
prescription of pension funds is envisioned to do.

The EFF seemed to side with the ANC as their MP Floyd Shivambu called the DA out
for “raising false alarms” about the prescription of assets. “There is no debate
worthy of the sensationalism created by the DA,” Shivambu said before adding that
regulation 28 of the Pension Funds Act regulates how pension funds should be invested.

He said there is nothing wrong with the prescription of assets – as long as it falls
within a defined development programme.

He suggested that the various municipal pension funds be consolidated into one and
that an asset manager should be appointed to invest a portion of the funds towards
developments such as municipal infrastructure, job creation and labour absorbing
sectors in the economy.

IFP MP Elphas Buthelezi, however, was not on the same side of the fence as the ANC
and EFF, and said that government would be “gambling” pension funds with the prescription
policy.

“We cannot trust the government to make the right investment decisions for people…
Take hands off the pension kitty,” he said. The majority of South Africans are saving
money in funds not to necessarily enjoy retirement but to make provision for their
families, he added.

**Apartheid policy**

FF Plus Wouter Wessels warned the ANC from following implementing a policy with 
good intentions, without considering the unintended consequences.

He urged government to learn from the mistakes of the apartheid government, who 
sought to stimulate the economy through the prescription of assets – but this strategy
left the government employee pension fund “completely depleted” by 1994.

“Learn from the past,” he said.

“Pension fund holders will have to increase their contributions and work longer 
and contribute for a longer time to account for the poor performance of investments,”
Wessels said.

He said government should rather fix SOEs, which have been plundered, than look 
into a policy of prescribed assets. “The poorest in South Africa will suffer the
most through this policy,” he said before adding that history repeats itself and
that the ANC is following the path of the now defunct National Party.

NFP MP Shaik Emam shared the view that government should rather make sure SOEs turn
profitable before investing any more funds in them.

“Until we get our house in order and manage affairs better, we must leave funds 
alone,” he said.

“The idea is good but the timing is not good,” he added.

[Article](https://m.fin24.com/Economy/prescribed-assets-are-an-apartheid-era-policy-thats-blatant-theft-of-pensions-mps-20190910)
by news 24