JOHANNESBURG, Gauteng — At the 70th-anniversary SALT Employee Benefits conference in Johannesburg, COSATU trade unionist Jan Mahlangu delivered a strong message advocating for prescribed assets to ensure retirement funds directly benefit their members. The push for legislated, compulsory investments has become a central talking point for labor leaders seeking to align pension capital with national economic development while safeguarding the financial future of workers.
The current legal landscape for retirement investments is dictated by Regulation 28 of the Pension Funds Act. This framework encourages asset diversification by capping the percentages allocated to equities, foreign holdings, and alternative assets. However, a persistent industry debate questions whether these funds should be legally required to support local infrastructure projects, such as water and energy initiatives, which are key government investment priorities.
The broader asset management sector has consistently pushed back against mandatory allocations. Industry professionals argue that investment mandates should remain voluntary, as asset allocation is a core professional competency that should not be dictated by external pressures. Despite this resistance, labor representatives argue the dialogue must evolve to tackle South Africa’s economic hurdles and redirect capital toward meaningful development.
Addressing the conference, Jan Mahlangu of COSATU challenged the industry to move beyond buzzwords. He questioned whether current “impact investments” in infrastructure are truly compulsory, urging a frank and transparent debate. He also acknowledged the valid concerns surrounding governance, specifically pointing to corruption issues like those seen in Madanga. Mahlangu noted that proponents of prescribed assets must confront this “elephant in the room” to effectively counter the arguments of skeptics who question the safety of such mandates.
Alongside investment strategies, the conference highlighted the severe financial toll of poor stakeholder communication within the retirement sector. Ensuring beneficiaries clearly understand their managed funds is paramount to building and maintaining trust.
Bianca Moyo, a Senior Communications Manager, clarified that the core challenge is not necessarily a total absence of communication, but rather a failure of the message to actually reach the member. She pointed to the pervasive issue of unclaimed benefits, noting that in an economy where fewer than 10% of citizens can retire comfortably, no worker would willingly abandon their rightful savings. She attributed this crisis to a dual failure: an administration gap and a communication gap, meaning members are simply never informed that a benefit is waiting for them.
The overarching consensus among retirement professionals at the event was clear. Across the entire value chain, from employers to pension fund administrators, the paramount directive must be protecting and prioritizing the financial interests of the pension fund members above all else.
