Why the government is eyeing your savings

The collective amount that South Africans have saved up for their pensions is big. About 16 million South Africans are members of retirement funds (with about 11 million still working and saving, the remainder having already retired). At the end of 2016, the total value of South African retirement funds was R4-trillion. This is nearly equivalent to the total size of South Africa’s economy (which is R4.4 trillion). In addition, this pot of retirement savings is the biggest in Africa, and one of the biggest in the world.

But this huge savings pot could be under threat. But with your help we can protect it.

The ANC has for some time spoken about the possibility of ‘prescribed assets,’ whereby pension fund managers could be forced by law to invest in certain sectors or companies prescribed by the government. This was also mentioned in the party’s recently launched manifesto.

It is no surprise that the ANC government, like the National Party government before it, is looking to force ordinary people to invest in certain assets. The fact is, the country is running out of money. The government’s wage bill is skyrocketing, and the sums needed to keep SOEs, such as Eskom, afloat are eye-watering.

The government has been spending more money than it receives in revenue for more than a decade now, and that trend shows no sign of reversing. Taxpayers cannot be squeezed for much more, and turning to international lenders is politically unpalatable. Pension funds are an obvious target.

The IRR has long warned that expropriation without compensation will encompass more than just land, and these developments indicate that our warning may be prescient.

Rather than looking to the pensions of ordinary South Africans, the government should sell SOEs, reduce its wage bill, and create an environment that is conducive to investment and job creation.

But don’t assume that you are helpless, or that there is nothing you can do about the risks. Help us put pressure on your fund manager and the government to protect your pension.

In the first step, we need your help by giving us your mandate to put pressure on the government and your fund manager. You can do that here.

In the second we will be contacting each of the major fund managers in South Africa and ask them what they are doing to protect your savings. We will also be visiting the offices of Association for Savings and Investment South Africa, to determine what they are doing to protect your savings. 

Thirdly, we will develop a legal strategy to protect your pension and savings from the government.

But we can only do this with your help. Give us your mandate to protect your savings.


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