Pension plan: apartheid throwback?

Yes there is..


Don't invest in Pension funds... manage your own investments.
 
Patel wants to use 5% of the private funds for infrastructure "investments"...
 
The Zuma's and Malema's must be licking their lips and rubbing hand together! all that money still available to squander like the rest. Bye-Bye pensions, here the Government squanders come!
 
Fair enough... if you have no choice, I do feel for you guys :(

I thankfully have a choice, and my money goes where I want it to.. and the minute a guavamint official decides it would be better used in one of their "investment" projects.. is the minute it goes offshore or under my mattress, it will be safer there.
 
Chill people. Its not nearly as bad as you guys make it out to be. The issue here is that they are bypassing the budget, *not* that the pension money is being bet on a BEE throw of the dice.

Your pension money is likely to be fairly safe under such a plan. I'll try to explain in laymans terms.

These things will be structured as a bond (Think of it as a loan). Bondholder (you) is not too exposed to the "performance" of the entity that issues a bond. Sorta like your bank manager doesn't care whether you had a cr@p month...he gets his interest on the loan come hell or high water. The main risk comes from the bond issuer defaulting (Being unable to pay). Thats a fairly high risk if the bond issuer is a sketchy company. In this case however its going to be a government initiative, which means that it will probably carry either a full guarantee by gov or an implied guarantee.

So unless they pull some really sketchy stunts & structure this very differently to what is the norm it won't be a problem. If they do that it'll be all over the financial press. Things to watch: Which entity is issuing the bonds & how closely its connected to gov. More connected = Better.
 
HavocXphere said:
Chill people. Its not nearly as bad as you guys make it out to be. The issue here is that they are bypassing the budget, *not* that the pension money is being bet on a BEE throw of the dice.

Your pension money is likely to be fairly safe under such a plan. I'll try to explain in laymans terms.

These things will be structured as a bond (Think of it as a loan). Bondholder (you) is not too exposed to the "performance" of the entity that issues a bond. Sorta like your bank manager doesn't care whether you had a cr@p month...he gets his interest on the loan come hell or high water. The main risk comes from the bond issuer defaulting (Being unable to pay). Thats a fairly high risk if the bond issuer is a sketchy company. In this case however its going to be a government initiative, which means that it will probably carry either a full guarantee by gov or an implied guarantee.

So unless they pull some really sketchy stunts & structure this very differently to what is the norm it won't be a problem. If they do that it'll be all over the financial press. Things to watch: Which entity is issuing the bonds & how closely its connected to gov. More connected = Better.
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Sure now I feel so much better...or not, Who would be the highest bidder? Malema?? I wish we can trust this Government in this ..... as I really cannot do so!
 
acidb said:
With this government, isn't that a given?
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Usually yes. In the financial world different rules apply though.

Lets say they pull some stunts and the whole thing turns goes sideways. See this part here:
South Africa’s debt is rated A3 by Moody’s Investors Service, its seventh-highest ranking, and one level lower by both Standard & Poor’s and Fitch Ratings.
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Thats how ZA bonds are evaluated overseas. Everybody & their dog uses these ratings. If this bond blows up and the gov doesn't step in to fix it then confidence in ZA bonds takes a nose dive & ratings take a hit. If the ratings suck then next time the gov needs money it would get a really k@k deal on the intl bond market & would be forced to pay much higher interest. There is enough common sense in the treasury to not go there.
 
HavocXphere said:
There is enough common sense in the treasury to not go there.
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While I'm sure that you are right here and I hope you are, but you must also remember that that is based on SA's history, ie same reserve bank governor and minister of finance...
Things have changed and this could do....I hope not.
 
Wish I could believe the anc@*++#8. But it seems thereare two things in their target. Bugger up the medical funds. And also the retirement funds. Of course they will aways have a garuanteed state pension and classy hospital to go to. But what does it bother their voters??. LOL they dont have these things anyway. So its noooo problem. Just as long as there is kfc and a cellphone... *Freedom of speech.. Use it while you can*
 
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alf101 said:
Most of us have no choice.

They may decide that our pension funds can only invest in BEE companies.

It's 1.5 trillion rands....
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Its no different to what happens with my pension fund at work. Even during negative growth times, the administrators like Momentum rip maximum benefits. This why I have chosen to have other investments like an RA.
 
dlk001 said:
Its no different to what happens with my pension fund at work. Even during negative growth times, the administrators like Momentum rip maximum benefits. This why I have chosen to have other investments like an RA.
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Perhaps I should start looking into this too now...I ain't getting any younger.
 
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