Mboweni says prescribed assets not on agenda

The Treasury has for the first time categorically denied that it is actively considering the introduction of prescribed assets.

Finance minister Tito Mboweni warned on Tuesday that making public comments on such a threat could result in workers cashing in their pension funds prematurely.

Mboweni’s remarks follow the recent statement by deputy finance minister David Masondo, who said that the government was committed to protecting workers’ savings.

LOWER RETURNS

At its national conference in December, the ANC said the introduction of prescribed assets

— which would require pension funds to invest in government bonds and perhaps state-owned entities — would be investigated. Critics have warned that such a measure would result in lower returns on pension fund assets.

“I want to assure all members of any retirement fund that government’s first and foremost responsibility is to protect their funds at all times, and we have in fact strengthened our regulatory system to continue to do so,” Mboweni said in a written reply to a question by DA finance spokesperson Geordin Hill-Lewis.

Hill-Lewis wanted to know if the Treasury was “actively considering” the introduction of prescribed assets.

The minister said: “In addition, the current regulatory framework in terms of the Pensions Fund Act places a fiduciary duty on trustees of funds to always invest prudently and in the best interest of the members. This naturally means investing for the long term, in ways that support economic development and growth, and earning good returns based on fund and market fundamentals. This is good for pension fund members as well as the country.”

He noted that regulation 28 of the Pensions Fund Act and a guidance notice on the sustainability of investments and assets required pension fund trustees to consider environmental, social and governance issues when making investments.

Mboweni emphasised in reply to the question that the Treasury had not held any consultative meetings in 2019 with the industry or anyone else about prescribed assets.