South Africa Proposes Pension Fund Rule Amendment

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In a bid to facilitate an economic recovery and fast-track infrastructural investment, South Africa’s National Treasury has proposed an amendment to Regulation 28 of the Pension Funds Act. Intended to increase investment in infrastructure in sectors such as transport, energy and water, the proposed rule aims to shield savers from over-concentrated investments and sets the maximum percentage of a fund’s assets that can be invested within different asset classes.  

Rather than introduce infrastructure as a new asset class – in which existing ones include equities, debt instruments and property – the proposed amendment allows for infrastructure investments to be included and recognized within current asset classes.  

A statement by the Treasury indicated that the changes should make it easier for retirement funds to invest in infrastructure and allow for better measurement of investment in projects. Additionally, the Treasury noted that the changes are informed by a number of calls for increased investment in infrastructure, given the current low economic growth climate.  

The draft amendments were published for comment on February 26 and are open for public comment until late March.  

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