PIC has explaining to do

Acting Public Investment Corporation (PIC) CEO Makano Mosidi said in June the corporation’s major focus in the next five years was to move the weighting of unlisted investments from 5% (R95bn) to 25% so that jobs can be created in SA and the economy transformed. This is worrying because more than 43% of unlisted companies underperform.

The PIC’s strategic objectives for investing in unlisted companies are strongly sociopolitical, including to “be a pioneer in the development of quality infrastructure together with excellent services for previously neglected markets such as townships and rural areas”.

The Unemployment Insurance Fund and the Compensation Fund indicated at the beginning of September before the parliamentary oversight committee and in the National Council of Provinces that they will review their mandate agreement with the PIC on unlisted investments.

The Government Employees Pension Fund’s mandate expired in March 2021. It was renewed only a year later, shrouded in secrecy. Can the PIC still invest money in the unlisted Isibaya Fund burdened with losses?

The sustainability of pension funds has become a growing concern. The Pension Fund Act for public servants requires a valuation of the fund’s financial report at least every three years. The the latest pension report fund was’ s in assets March is 2021. more The than fair R2.041trillion. value of The liability to retirees, their dependants and members still working is R1.859-trillion.

That amounts to a small surplus of R187bn. But the necessary contingency reserves required in terms of this legislation amount to R893bn. Should contingency reserves be required, the deficit would be R706bn. That is worrying.

The Mpati report listed improper investment practices at the PIC. The PIC is silent on welldocumented, increasing losses. Why is no action taken against the individual or company involved? Who benefits from the losses?

The PIC has a lot of explaining to do.

Joe Kleinhans Annlin