Pensioners stand to lose hard-earned money if PIC funds SAA - DA

Cape Town – Government can expect a huge pushback from members and pensioners of the Government Employees Pension Fund (GEPF) if their money were to be used for an SAA bailout, said Alf Lees from the Democratic Alliance (DA).

During a Parliamentary briefing on Friday, Finance Minister Malusi Gigaba confirmed that SAA indicated in its corporate plan that the PIC, which administers the GEPF money among others, could be a source of funding for the struggling airline.

The corporate plan for 2017 to 2022, which was tabled by National Treasury in Parliament on Friday, listed the “sources and uses” of funds for SAA’s capital requirements and the PIC was listed as a source of funding of R6bn for the 2018 financial year.

READ: SAA lists PIC as possible funder of R6bn in 2018 

Lees said the fact that Gigaba confirmed during the briefing that there is no privatisation on the cards for SAA confirmed that pensioners' money is being considered to fund the airline.

“All of this despite the fact that the airline is practically bankrupt,” said Lees, “recording a loss of R1.4bn for the first three months of the current financial year.

“Considering that privatisation is off the cards, it means that these funds would have to come in the form of a loan or a bailout. This puts millions of pensioners at the risk of losing their hard-earned money.”

National Treasury was previously pressed to confirm whether it was considering the PIC as a minority equity partner for SAA, but this option was neither confirmed nor denied.

READ: PIC in the mix of options to fund loss-making SAA 

Suspicions about the PIC’s role in funding SAA were raised after Gigaba said during a plenary session of the National Assembly that a minority equity partner for SAA will not necessarily be from the private sector.

Gigaba told Fin24 on Friday on the sidelines of the Parliamentary briefing that National Treasury was not involved in putting together SAA’s corporate plan and he would therefore not answer questions about the PIC’s listing as a funder for SAA.

The consideration of the PIC, however, is likely to raise the ire of members of the GEPF who are likely to resist the PIC’s attempts to avail money to SAA.

The GEPF previously denied being approached with a proposal to become an equity partner in SAA and urged its members not to “panic” or read too much into speculation.

READ: PIC, GEPF face pressure to invest in ailing SOEs - researcher 

Meanwhile, Charles Collocott, a researcher at the Helen Suzman Foundation, warned that the PIC and Government Employees Pension Fund (GEPF) are likely to come under increased pressure to make investments in struggling state-owned enterprises.

He said if the GEPF Board of Trustees acts as they should in representing their members and pensioners, irresponsible investment decisions will not be made and he cautioned members and pensioners to raise their concerns with the Fund. 

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