Finance Minister Tito Mboweni acknowledges that the government has to work hard to get the buy-in from pension funds to invest in its planned infrastructure development projects.
Mboweni was responding in writing to a parliamentary question from IFP MP Mfakazeleni Buthelezi, who asked, given the “brazen display of corruption, negligence and incompetence,” how the state is going to get the pension funds to support these projects.
In response, Mboweni admitted that corruption and the government’s lack of performance is an issue.
“The best way to inspire confidence in any government project is to generate economic growth, rid our country of corruption and inefficiency and to ensure that the people of our country can trust public servants who manage the projects in which they invest their funds,” he said.
Mboweni did not address the issues of corruption and state inefficiency directly, but pointed out that the government is looking to improve the investment environment for investors by focusing on stabilising debt and improving economic growth, as indicated in its Medium-Term Budget Policy Statement.
In response to another question by Buthelezi, on whether unclaimed pension benefits can be used by the state to deal with the Covid-19 crisis, Mboweni said this cannot be done because the money does not belong to the government.
“Unclaimed benefits are no different from any other retirement fund benefits, meaning these benefits belong to members and beneficiaries. They are therefore held and managed by boards of trustees of these funds, and not government.
“Government is therefore not in a position to access or utilise unclaimed retirement fund benefits.”
There is also the matter that these funds are not centralised and held in one fund, making it difficult for any state entity to access or manage it.
However, it seems that people who are taking strain during the crisis can expect some relief.
“As announced in the recent Medium-Term Budget Policy Statement, government will introduce necessary legislative amendments next year to allow for limited withdrawals from retirement funds under certain circumstances, but linked to mandatory preservation requirements.”