CAPE TOWN (Reuters) - South African labour federation Fedusa said on Saturday it would consult rival federations over withdrawing an investment mandate the workers’ pension fund has with one of the continent’s largest asset managers, the Public Investment Corporation (PIC).
The PIC manages South African government employee retirement funds and has been in the spotlight recently after reports the finance ministry requested money from the pension fund to bail out struggling state firms. Finance Minister Malusi Gigaba has denied making such a request. [L8N1M61M4]
Gigaba on Friday asked the PIC, which manages assets worth close to 1.9 trillion rand ($138 billion), to conduct an investigation into any concerns over irregularities.
On Saturday, the head of the Federation of Unions of South Africa - Fedusa - said they would urgently consult all their structures and other trade union federations, such as COSATU, over the pension fund concerns.
“The union federation will propose that organized labor review and possibly withdraw the investment mandate the Government Employees Pension Fund (GEPF) has with the PIC,” said Dennis George, Fedusa general secretary.
The GEPF is the single largest public sector client of the PIC, with more than 1.67 trillion rand of GEPF’s assets managed and invested by the PIC, said George.
“Our preliminary view is that there is no obligation in law for the GEPF to retain the PIC as the exclusive manager of these assets,” George said in a statement.
He said the possible withdrawal of the investment mandate was necessary to protect the asset manager against political interference and to protect the pensions and savings of public sector workers.
($1 = 13.7675 rand)
Reporting by Wendell Roelf; Editing by Andrew Bolton