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South Africa seeks to lift infrastructure investment with change to pension fund rules

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South Africa seeks to lift infrastructure investment with change to pension fund rules

South Africa’s National Treasury is proposing altering rules governing pension funds to help investment in infrastructure initiatives.

Africa’s most industrialised nation – the toughest-hit by the coronavirus pandemic on the continent – has keep public works in sectors equivalent to transport, energy and water on the heart of its financial restoration plans.

Early Newspaper

The Treasury is proposing changes to Regulation 28 of the Pension Funds Act in draft amendments published for public touch upon Friday. This rule sets the maximum share of a fund’s sources that would be invested in varied asset classes and is aimed to defend savers from over-concentrated investments.

The proposed amendments create now not introduce infrastructure as a unusual asset class alongside gift ones like equities, debt devices and property nonetheless permit for infrastructure investments to be recognised within those asset classes.

They additionally dispute overall investment in infrastructure right thru all asset categories might maybe maybe maybe now not exceed 45% of domestic publicity and an further 10% for the remainder of Africa.

The changes might maybe maybe maybe restful develop it less complicated for retirement funds to make investments in infrastructure and permit for better measurement of investment in initiatives, the Treasury stated in a observation.

The changes are “knowledgeable by a series of calls for elevated investment in infrastructure given the most up-to-date low financial development native weather,” it stated, stressing that the resolution to make investments in any asset class remained up to the board of trustees of every fund.

The public can touch upon the amendments till gradual March.

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South Africa seeks to lift infrastructure investment with change to pension fund rules

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