Public Service Association warns over PIC losing billions in Government Employee Pension Funds

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The Public Service Association has warned of the serious consequences for workers should the Public Investment Company (PIC) lose billions in Government Employee Pension Funds.

It follows revelations from IT group, AYO Technologies, on its settlement deal with the PIC, saying it will repurchase R619-million in shares from the fund, and grant it two seats on its board.

Budget 2022 | Some employees will now be able to benefit from the proposed changes to the pension fund:

In 2017, the PIC invested over R4 billion of government employees’ pensions in AYO Technology’s initial public offering shares.

The Public Service Association’s National spokesperson Claude Naiker, “In the long run, if one calculates the pension benefits that are paid out to members on a fixed formula, sooner or later if that money is not recouped or replenished, the fund will be in dire straits, as far as paying out members their pension benefits.”

Naiker adds: “If they had gone that route, and AYO Tech was declared insolvent or bankrupt, or if they had to recoup the entire money, then they would be in dire straits themselves. So, what they are saying is it was for the benefit of both parties that the settlement agreement has been reached.”