ACDP Whip and MP, Steve Swart, sharing the party's concerns about prescribed assets in a speech on Tuesday said it is "ironic that one of the bulwarks of the apartheid regime could be making a spectacular come back".
"It is, however, being sold with a different kind of rhetoric; that financial institutions are not doing enough for the developmental state; that they are chasing the short term returns on the JSE and overseas markets instead of investing in long term infrastructure," Swart said.
The party cautioned that the money invested in pension funds belonged to ordinary workers who were saving for their retirement.
"They need maximum possible returns on investment with the minimum risk. Behind every rand invested, there is a South African pensioner, a South African worker."
Prescribed assets mean that the government authorises the investment of retirement savings into certain developmental assets and the party says this runs the risk of poor investment returns.
The reason, he said, is that these investments would most likely be in "a predictable list of broken down state-owned enterprises such as Eskom, Transnet, Sanral, and SAA".
"There are about R400bn in government guaranteed SOE bonds of which three-quarters is accountable for by Eskom," Swart said.
"The remaining defined benefit funds such as the Government Employees Pension Fund (GEPF) simply can’t absorb lower investment returns indefinitely. These defined funds have to pay a pre-arranged pension, but do not undertake to pay inflation-linked increases."
The party said most pensioners on defined pension funds could lose up to 14 percent in their pension should prescribed assets result in the compulsory funding of dysfunctional state-owned companies.
"This is totally unacceptable, and (surely) all trade unions would oppose such a move, which would be to the detriment of their members," he said.
"We have witnessed widespread looting and plundering of SOEs through corruption and state capture. This has resulted in the precarious financial and operational state of such SOCs, and in particular, Eskom, which poses the most severe threat to our economy.
"Loadshedding earlier this year largely resulted in a contraction in economic growth," Swart said.
The ACDP MP said state capture and corruption had resulted in a lack of trust as taxpayers money was misappropriated in the process.
"This trust deficit has yet to be restored. We cannot allow public and private pensions to be similarly looted through a process of prescribed assets.” - ANA
