Public Investment Corporation facing a membership revolt
Failure by Treasury to heed the union's calls for bigger board representation could see them ditching PIC and looking for a new fund manager.
Former Public Investment Corporation CEO Dan Matjila. Picture: Gallo Images
Despite internal audit findings exonerating Public Investment Corporation (PIC) chief executive officer Dr Dan Matjila over the weekend, trade unions representing thousands of workers whose pensions are managed by PIC are unhappy with Africa’s largest asset manager.
The Public Servants Association (PSA) has become the latest union to threaten to pull out of the PIC. They are demanding that Finance Minister Malusi Gigaba include their members on the board of directors.
The 11-member board, chaired by deputy minister of finance Sfiso Buthelezi, currently has no union representatives. It includes accountants, city planners as well as lawyers, none of whom have a direct relationship with workers’ unions.
The Star is reporting that the union is demanding a greater say in how government invests their pensions. The Government Employee Pensions Fund (GPEF) board of trustees has one union representative.
GEPF is the biggest contributor towards PIC’s asset base, as it is the continent’s largest pension fund, with more than than 1.2 million members. It has in excess of 400 000 pensioners and beneficiaries, and assets worth more than R1.6 trillion.
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Three weeks ago, The Federation of Trade Unions in South Africa (Fedusa) threatened to withdraw from the PIC. Fedusa said the decision was preceded by support from parties in parliament.
PSA general manager Ivan Fredericks is quoted as having lobbied for a direct say in how PIC invests its money.
“In the interest of all employees whose pensions are invested via the PIC, the PSA is calling on the minister to ensure GPEF is strongly represented on the PIC board. The PSA is further insisting on labour positions on the boards of all companies, where GPEF fund are invested by PIC.
“Failure to adhere to these calls to ensure greater security could ultimately result in the PSA insisting on GEPF appointing a new fund manager and dropping the PIC as an investment vehicle,” Fredericks said.
Johannesburg Stock Exchange (JSE) chief executive Nicky Newton-King reportedly told the standing committee on finance yesterday the PIC owned 12% of the JSE Limited. She said the JSE had a market capitalisation of R15 trillion.
At the same meeting, National Treasury told MPs many South Africans invested through their pensions with an estimated R4 trillion in retirement funds.
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