Should retirement funds invest in SOEs?
Maladministration, poor governance and corruption have had a devastating effect on the country’s ailing state-owned enterprises (SOEs), leaving them facing extensive financial difficulties.
Business Day recently reported that financial institutions may approach the Constitutional Court if government forces pension funds to invest in bankrupt state-owned enterprises. This followed a proposal in the ANC election manifesto that government investigate the introduction of prescribed assets for financial institutions. This means pension funds could be required to invest a certain percentage of their funds in government or parastatal bonds following an amendment to the Pension Fund Act.
Anne-Marie D’Alton, CEO: Batseta Council of Retirement Funds for South Africa, wrote an interesting article for the FCSA Bulletin about this issue. Click here to read the full article.