Spokeswoman Helen Ueckermann said the "immoral" proposal should be abandoned.

"Out of respect for the country's workers, government should put a stop to this plan before it goes one step further," she said.

"The mere fact that this so-called plan is on the African National Congress' table for discussion borders on the immoral."

The plan is reportedly due to be discussed at the ANC policy conference which kicks off on Tuesday in Midrand.

Ueckermann said reputable role players in South Africa's pension and asset management industry would not allow pension fund money to be invested in state development projects.

"The risk of fraud and corruption is considerable and it is doubtful whether the state will be able to create investment opportunities with a good return on investment on the workers' savings," she said.

"The millions of rands out of the civil service pension fund invested in Gauteng's doomed e-tolling project are a frightening case in point," said Ueckermann.

She said if the plan was introduced, it would be detrimental to the much-needed investment in South Africa.

"This absurd plan is a golden opportunity for the ANC to alienate investors even further," she said.