Balancing the books: Trade and Industry Minister Ebrahim Patel would like retirement funds to invest to promote growth.
As the country’s state-owned entities buckle under the weight of their debt — and reap the results of years of mismanagement and corruption — the ANC election manifesto’s proposal on prescribed assets looms ever larger as a means to rescue them. Power utility Eskom will run out of cash by October, Denel was unable to pay full salaries to staff this week until rescued by “a lender”, and the SABC cannot pay creditors such as the City of Johannesburg, according to aAlexander Forbes Investments warned during a presentation this week of the negative consequences asset prescription could have, not only on pension outcomes but also on the wider economy.
Asset prescription would force entities such as pension funds to invest in certain assets, such as parastatal bonds. The negative consequences would not only be felt by pension fund members but also affect foreign direct investment in South Africa, as well as hamper the country’s ability to fund its current account deficit, said Isaah Mhlanga, executive chief economist at Alexander Forbes.
What will they plunder when they have exhausted the money in the pension funds?
Please stay very Far Away from Workers Money!
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