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Govt set to review Regulation 28 - 'not necessarily bad for retirement funds'

29 October 2020 6:51 PM
Tags:
The Money Show
Retirement
Bruce Whitfield
pension funds
Retirement funds
prescribed assets
prescription of assets
pension fund assets
2020 Medium-Term Budget Policy Statement
Emda Fourie

Are prescribed assets on the cards again? Bruce Whitfield interviews Emda Fourie (Momentum Consultants and Actuaries).

The future of retirement funds will be affected by one of the coming changes "hidden" in the detail of Wednesday's Medium-Term Budget Policy statement.

Government is set to review Regulation 28 of the Pension Funds Act.

RELATED: What does the contentious Regulation 28 mean for your retirement funds?

The aim is to make it easier for retirement funds to boost investment in infrastructure.

Does this, once again, raise a red flag that the authorities are set to pounce on our pension savings through prescribing assets? .

Not necessarily says Emda Fourie, Head of Consulting: Inland at Momentum Consultants and Actuaries.

There's been support from the industry all along for changes to Regulation 28 she says, but this does not include prescription.

We are excited by the fact that it now seems that legislation is going to review Regulation 28 and it's going to increase funds' chances of investing in infrastructure.

Emda Fourie, Head of Consulting: Inland - Momentum Consultants and Actuaries

Comment was made that it would only be under circumstances that are right for the outcomes of the retirement fund members.

Emda Fourie, Head of Consulting: Inland - Momentum Consultants and Actuaries

A lot of people out there were concerned that if there is prescribed assets that get included in Regulation 28 that their money will be used to fund all sorts of projects that aren't going to bring them money... but we are very comfortable with the way that the minister has announced it.

Emda Fourie, Head of Consulting: Inland - Momentum Consultants and Actuaries

Fourie does acknowledge that nothing is certain until the changes have been put into writing and the bill passed.

But the way the minister put this forward, we think there's lots of opportunity to improve on the amount the funds can invest in infrastructure... We fully agree that prescription is not the right way to go...

Emda Fourie, Head of Consulting: Inland - Momentum Consultants and Actuaries

Getting a return from a state-owned enterprise (SOE) of 8/9% wouldn't be a bad deal provided of course it was a solid return... As long as you've got better people running the projects than ran the building of the Eskom power stations, because that's the kind of infrastructure we're talking about...

Bruce Whitfield, The Money Show host

Listen to the complete conversation below:


29 October 2020 6:51 PM
Tags:
The Money Show
Retirement
Bruce Whitfield
pension funds
Retirement funds
prescribed assets
prescription of assets
pension fund assets
2020 Medium-Term Budget Policy Statement
Emda Fourie

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