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Pensions not being used to bail out SOEs - Ramaphosa

Cape Town – Deputy President Cyril Ramaphosa on Wednesday said concerns that the Public Investment Corporation (PIC) uses pensioners’ money to bail out struggling state-owned entities are unfounded.

He was responding to a question from the Democratic Alliance’s (DA) Natasha Mazzone about the entity’s investment in the debt of state-owned enterprises.

The PIC invests money on behalf of government employees of the Government Employees Pension Fund (GEPF) and there have been concerns about the entity’s exposure to the bonds issued specifically by state-owned entities.

READ: Vavi’s federation condemns use of pensions to bail out SOEs

“The PIC will always make sure funds are well-managed. Some years ago the PIC was worth half a billion rand,” Ramaphosa said, “and now it’s well above one trillion rand and more. They invest pension funds very wisely and they invest those through a number of companies. The PIC’s investment strategy is prudent and it is a well-managed investment house.”

Ramaphosa said he couldn’t find fault with the fact that the PIC invests in the bonds issued by SOEs. “That doesn’t mean they are bailing out SOEs – they are merely investing. They know for example a state-owned entity, such as Eskom is a cash generator and they can get their money back.

“I don’t think government employees’ pension funds are being squandered. The PIC has distinguished itself as a good money manager.”

He told Mazzone to have faith in the PIC’s ability to manage government employees’ money properly. “They manage my money and your money. Relax and take the journey with us."

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