Diversify investment of public servants' pensions - advocacy group

The Association for Monitoring and Advocacy for Government Pensions has called for a more diversified management of public sector employees' funds, whose contributions are mainly administered by the Public Investment Corporation.

The non-profit group said there was no reason why the PIC should manage the bulk of government employees' pensions, citing cases where pensions have been invested in entities such as the VBS Mutual Bank, where the corporation lost millions after the bank's collapse.

"There should be a spread in investment," said AMAGP representative Albert van Driel, adding that other agencies should invest on behalf of the Government Employees' Pension Fund (GEPF).

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Giving evidence before the Commission of Inquiry into the PIC, Van Driel also criticised the PIC for what it called unwillingness to disclose information, stating issues of confidentiality, which he said had caused trust challenges between the body and the asset manager.

He said that there had been signs of disregard for members, who were at times kept in the dark about operational matters.

According to Van Driel, there had been instances where the PIC had been used as a "piggy bank" to carry out the government’s development role.

Bonuses 'not fair'

Earlier, the inquiry heard evidence from PIC executive head of property Vuyani Hako, who was asked about the corporation’s bonus scheme. "I think the general feeling is that the determination of bonuses is not a fair process.

"I think the feeling is that the determination of bonuses could be more certain...[and] clearer," said Hako.

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Hako said the PIC was approached for funding through unsolicited applications from clients or their advisors, referrals by other funding institutions, and via deal originators.

Last year, President Cyril Ramaphosa appointed a commission of inquiry to probe allegations of impropriety into the asset manager, which manages over R2trn in government employees’ pensions.

The integrity of PIC executives had come under scrutiny in recent years, with allegations of bribe taking by certain officials in the VBS saga and an internal probe against its former chief executive Dan Matjila.

Matjila resigned as chief executive in November.