Pen­sion­ers’ money safe – but not the tax­pay­ers

The Citizen (KZN) - - News - Rorisang Kgosana

De­spite the Congress of South African Trade Unions’ (Cosatu) propos­ing to use gov­ern­ment pen­sions to res­cue Eskom, the money would re­main safe, chair­per­son of In­tel­lidex Stu­art Theobald said.

Cosatu pro­posed to cut the power util­ity’s R450 bil­lion debt by R250 bil­lion, by get­ting aid from the In­dus­trial De­vel­op­ment Cor­po­ra­tion (IDC), the De­vel­op­ment Bank of South­ern Africa, and the Public In­vest­ment Cor­po­ra­tion (PIC).

The PIC man­ages over R2 tril­lion in in­vest­ment in­clud­ing their big­gest client the Gov­ern­ment Em­ploy­ees Pen­sion Fund (GEPF).

“The PIC is the fund man­ager of the GEPF. The GEPF is the pre­paid fund that al­lows gov­ern­ment to meet its obli­ga­tion to pen­sion­ers. If the GEPF un­der­per­forms in terms of fi­nan­cial re­turns, the pen­sioner is not af­fected in terms of the ben­e­fit be­cause the gov­ern­ment guar­an­tees these ben­e­fits,” said Theobald.

But it was gov­ern­ment that would have to make up for the short­fall, there­fore plac­ing the tax­payer on the hook, Theobald ex­plained.

“The fund holds as­sets to meet es­ti­mates of fu­ture li­a­bil­i­ties. These es­ti­mates are done by ac­tu­ar­ies, and the gov­ern­ment has to pay into the fund, if the amount in the fund is not suf­fi­cient to meet the ac­tu­ar­ial li­a­bil­i­ties.

“Any pay­ment that gov­ern­ment makes is com­ing from its gen­eral rev­enue fund, which is the money it col­lects from tax­pay­ers.”

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