Dear Friend of the IRR,

Where are your retirement savings? Do you have money in a pension fund?

If so, your savings might be in danger. The point of a pension fund is to invest money for your future. The job of financial and asset managers is to manage your investments so that the return on your investment is as high as possible.

But if the ANC were to implement their prescribed assets policy, asset managers would be forced to invest a percentage of their clients’ money in government assets, such as government bonds and state-owned enterprises (SOEs) like Eskom.

Government bonds and SOEs can be good investments, and if they are, then the government doesn't have to force asset managers to invest their clients’ money in them. But we know that in South Africa, that is not necessarily the case: the government does not spend money well, which means that if we give it more money through prescribed assets, it will be wasted on bailouts, debt servicing, and corruption.

A win for the IRR, but the fight is not over

The IRR first flagged the ANC’s prescribed assets policy as a threat in early 2019 and immediately launched a campaign against it. We asked South Africa’s largest financial and asset management companies: were they willing to hand the government money their clients have entrusted to them?

The media and the financial sector accused us of stirring panic, but we doubled down our efforts. In the meantime, sector insiders alerted us to the fact that negotiations between sector leaders and the Presidency had been underway for months. The financial sector was getting ready to sell out their clients.

We then launched a letter-writing campaign prompting the public to ask their own financial providers about prescribed assets. When we were informed of management memos warning staff that nobody was to engage with the IRR on prescribed assets, we knew we were on the right track.

Finally, in September 2020, Magda Wierzycka publicly accused the IRR of blackmail when we engaged with her about the position of her company, Sygnia Ltd, on the issue of prescribed assets and stated that we would make our correspondence with her public on social media.

Though untrue, Wierzycka’s blackmail claim focused national attention on prescribed assets and the IRR’s fight against it.

The IRR’s campaign not only halted the looting of pensions and savings for years, but also ensured a fundamental shift in attitude within the financial industry.

When the ANC included prescribed assets in its recently released election manifesto, the attitude shift in the industry was clear: Wierzycka herself has taken a strong stance against the policy, writing on Twitter: “First they rob South Africans through taxes. Then by mismanagement of the economy and the Rand collapse. Now it’s a raid on our retirement savings. BTW most asset managers already hold 20%+ of government bonds. When is it enough? There is little left.”

We welcome Wierzycka’s strong stance against this disastrous policy and encourage other asset managers and companies to follow her lead and help the IRR keep the government’s hands off the assets South Africans have worked so hard to earn.

Stopping pro-poverty forces and policies means stirring the pot. It is thanks to your support that we can continue to stir the pot and fearlessly fight against pro-poverty policies like prescribed assets.

It is also thanks to your support that we can offer pro-growth solutions. Instead of using South Africans’ savings to fund their overspending, the government should slash waste in public procurement and cut taxes to fuel economic growth. Find out how in our report, titled “Slash Waste, Cut Taxes”, available on our website.

Live Free. Prosper.