This article appeared in the 17 October edition of Legalbrief Today, under Policy Watch, and was not reserved for subscribers only

Finance Deputy Minister David Masondo has drawn attention to the potentially ‘enormous power and influence’ of pension funds and similar ‘long-term’ fund management instruments to ‘drive’ economic reform and growth by ‘insisting on high standards of delivery, governance, and social responsibility’. Included in his address at a recent ‘private investors for Africa’ event, the Deputy Minister’s observations may have been prompted by ANC plans to ‘investigate the possibility of using pension savings to support SA’s broader social and developmental agenda’ (Daily Maverick), popularly termed ‘prescribed assets’. While the term was not used in his speech, Masondo did ask ‘what prevents’ the ‘potential’ of pension funds and similar fund management instruments from being ‘unleashed’ for developmental purposes.

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The Deputy Minister’s observations at the ‘private investors for Africa’ event tend to add another dimension to his remarks during Tuesday’s National Assembly Finance Standing Committee meeting when, he apparently expressed the view that fund managers should not be ‘compelled’ to ‘invest in bad programmes’ (Business Day). This would serve only to ‘squander’ workers’ ‘deferred’, ‘hard-earned’ wages – savings that ‘must be protected’, according to his speech at the investors’ gathering. Tuesday’s remarks were made before a briefing on the Public Investment Corporation’s (PIC’s) 2018/9 annual report and may have been prompted by concerns about the PIC’s ‘governance challenges’ (EWN) and allegations of improper investment-making processes. It is not clear from the Business Day report if the issue of prescribed assets was discussed at the meeting.