PSA calls for safeguarding of civil servants' pensions after Steinhoff drop

The Public Service Association (PSA) has called for the safeguarding of public servants’ pension investments after the dramatic crash of retailer Steinhoff‚ which had lost R194-billion of its total market value by close of trading on Thursday.

PSA‚ the second-largest public service trade union in South Africa‚ represents around 230‚000 government employees.

All government workers belong to the Government Employees' Pension Fund (GEPF) which is managed by the Public Investment Corporation (PIC).

The PIC holds 8.56% of Steinhoff shares listed on the Johannesburg Stock Exchange. Two weeks ago‚ that percentage was worth R20-billion but by mid-morning on Friday‚ it was worth just over R2-billion. That should be seen in the context of a R1.8-trillion investment fund the PIC manages.

Analysts have explained that the fall in share price would have around a 1 to 2% effect on government employees' pensions.

“It is claimed that members of the Fund may have lost around R12.5-billion through losses in investments in Steinhoff. The GEPF is the single biggest investor in the JSE and losses because of share-price drops on the JSE following the Steinhoff disaster are still unknown‚ but are expected to be severe‚” PSA deputy general manager Tahir Maepa said in a statement on Thursday.

“The PSA has in the past focused on unlisted investments‚ but will now intensify its fight to also focus on listed investments. The PSA will not allow financial mismanagement and corruption to impoverish public servants and will take all necessary steps to ensure that members' rights and interests are protected.”

Finance Minister Malusi Gigaba announced on Thursday that the Financial Services Board was investigating the matter‚ while trade union federation Cosatu has called for the “criminals” involved to be arrested.