Pensions

Cosatu demands to know if Gigaba will use employee pensions to bail out SAA

Finance Minister Malusi Gigaba has apparently contradicted deputy president Cyril Ramaphosa’s parliamentary assurance that Public Investment Corporation (PIC) funds will not be used to bail out struggling state-owned entities.

In June, Ramaphosa told MPs: “What one can say clearly is that GEPF [the Government Employees’ Pension Fund], which is managed by PIC [Public Investment Corporation], will always make sure that funds of contributors are safe and well-managed.”

Business Day reports that this is exactly what Gigaba told the Cosatu central executive committee meeting: government may attempt to access funding for the state-owned entity’s looming bailouts.

If the report is accurate, it will appear the minister either lied or willfully misled parliament on the same issue. In a written response to DA’s Alf Lees, Gigaba denied investigating the possibility of SAA seeking funding from the PIC.

It was recently revealed the ailing South African Airways (SAA) may need almost R10 billion to stabilise its cash flow and guarantee jobs. The national carrier recently cut international routes, and is currently demanding the Angolan government repay the R840 million it owes in services fees.

Reuters also quotes a Treasury document showing that, despite SAA running of one of Africa’s biggest fleets, it remains a loss-making operation. The airline is reportedly owed R1 billion in revenue earned in other African countries, with Angola the single largest debtor.

READ MORE: Ramaphosa confident state pensions are safe

This issue appears to have dominated the meeting, with Gigaba admitting government is struggling to raise funds in the wake of creditors and lendors threatening to pull the plug over the Bedfordview-based company. Workers are understood to have demanded guarantees from the minister that their hard-earned pension money would not be pilfered.

This is the same concern raised by DA shadow public enterprises minister Natasha Mazzone during the same session in which Ramaphosa assured civil servants that PIC, a fund manager for GEPF, has a prudent investment strategy.

Mazzone had informed Ramaphosa that civil servants, including MPs, were jittery that their pensions would be squandered on state-owned entities currently plagued by maladministration.

National Health and Allied Workers Union (Nehawu), Cosatu’s biggest affiliate, is said to have repeated the same objection, telling the finance minister bailing out “mismanaged and corrupt” SAA would be the mismanagement of workers’ pension funds.

In a previous statement, Nehawu was quoted as having said it “will not stand idle while workers hard-earned money is used to fund the looting spree at SAA”.

The issue was expected to have dominated the meetings on Tuesday night’s agenda, with delegates acknowledging that it was a very complex matter, as it could affect employees at SAA.

Finance ministry spokesperson Mayihlome Tshwete has been quoted acknowledging Gigaba’s sharp turn on the matter: “The minister was saying we should not have an assumption that this is something [the PIC] that can never be used to and can never be touched because some of the benefits of what we are trying to target are national economic matters that everyone, including people who are pension holders.”

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