Unlocking Workers' Wealth: A Call for South Africa's Pension Funds to Invest in Public Good

The Public Investment Corporation (PIC) and the Government Employees Pension Fund (GEPF) are facing increasing scrutiny over their management of trillions of rands that could be used to address South Africa's urgent infrastructural needs. Brian Ashley, director of the Alternative and Information Development Centre (AIDC), argues that these funds should redirect their focus from financial markets to essential public services.

Investment Crisis Amidst Abundance

South Africa is grappling with an unemployment crisis that is considered one of the worst globally, exacerbated by years of deindustrialisation. Despite managing over R3 trillion in pension funds, much of this capital is funneled into the stock market and private deals, rather than supporting local economic development. The current management strategy prioritizes financial growth for asset managers over meaningful investments that could create jobs and improve infrastructure.

Reimagining Pension Fund Usage

AIDC's findings suggest that the GEPF has consistently generated significant cash surpluses, with an average of R50 billion annually since 2011. In 2025 alone, the surplus reached about R37 billion. However, instead of being used to fund public housing, transport, and water systems, these surpluses are reinvested to accumulate more financial assets. Ashley argues for a transition to a pay-as-you-go system that would allow more of this surplus to be allocated towards social and public goods, rather than merely expanding capital for its own sake.

Transforming Economic Priorities

To truly benefit workers, the GEPF should be leveraged to support initiatives that create jobs and develop infrastructure. This includes building energy-efficient homes and enhancing public transport systems, which could also spur demand for locally manufactured goods. The irony lies in the fact that the GEPF already holds substantial government bonds, indicating that workers' money is already financing the state. However, this funding is often utilized at market rates, leading to increased debt service costs that ultimately hurt public services and workers themselves.

As the discussions around PIC controversies unfold, it is crucial for unions and workers to challenge the current management of their pension wealth. The focus should not only be on holding accountable those involved in corruption but also on redefining how these financial resources can be used to transform South Africa's economy for the benefit of its working-class majority.

Source: www.dailymaverick.co.za