By Richard Mantu, tel: (012) 314-2419

Government is to introduce new legislation to corporatise the Public Investment Commissioners (PIC), a state-owned institution that manages public servants pension funds.

This is expected to facilitate good returns for public servants and allow the PIC to operate as a modern, professional world-class investment manager.

The Public Investment Corporation Act will come into effect on 1 April, repealing the 1984 Public Investment Commissioners Act.

PIC CEO Brian Molefe said the new legislation would protect the PIC as a legal entity but would be owned solely by government.

This will also enable the PIC to operate as a financial services provider as contemplated by the Financial Advisory and Intermediary Services Act, and governed by Companies Act and protocols on Good Governance.

In this way, the PIC will report to Parliament and the Standing Committee on Public Accounts (Scopa).

Mr Molefe said, however, that the PIC as a corporate entity would continue to use its current managers to manage assets.

The PIC uses RMB Asset Management, Stanlib, Futuregrowth, Sanlam Investment Management and Old Mutual Asset Management as its asset managers.

The biggest contributors to PIC assets are public servants through the Government Employees Pension Funds (91.29 percent), Compensation Commissioners (3.20 percent), Associated Institution Pension Fund (2.61), Unemployment Insurance Fund (1.65), Guardian Funds (0.65) and Political Office Bearers Pension Funds (0.13).

PIC COO Albertina Ngwezi said public servants would benefit through maximum performance of their assets by ensuring that their pension funds were paid out in time.

"The worker will benefit from better performance of their assets. Through the GPEF, (the PIC) is making sure that the pension fund is fully funded. Through the UIF we maximizing the returns to making sure that we will pay out when it's required.

"...And other general benefits that will occur for workers is through PIC's initiatives of Black Economic Empowerment, which we feel very strongly about," said Ms Ngwezi.

The new Act means that all assets, liabilities, rights and obligations of PIC will be transferred to the Corporation.

However, Mr Molefe said the PIC would transfer operational assets such as office equipment but "assets under management, the assets of the GPEF will be assets of the GPEF and are not transferred anywhere."

Under the new Corporate PIC, the state is sole shareholder and the Finance Minister represents the state as a shareholder who appoints and approves the Board.

The Board controls the PIC, which becomes an investment management business to service its clients.

Mr Molefe said for the sake of continuity, the current commissioners and treasury officials seconded to the PIC would become the current Board. - BuaNews