Tuesday that pension funds – including those in the private sector – could be a source of funds to save debt-ridden power utility Eskom.

He added that he understood people were worried about their pensions being used to “go down a loss-making entity”, but added that Eskom was being “revitalised” and would be worth investing in.

“The Reserve Bank estimates there are over R8 trillion in pension funds. Imagine if 10% of that went into alternative investments – that’s R800 billion for Eskom and water projects,” Ramaphosa said.

using funds from the Government Employees Pension Fund, through the Public Investment Corporation and other state-owned developmental institutions, to take over R250bn of Eskom’s R450bn debt obligations.

Cosatu’s proposal was used as a basis for talks between unions, government and business bodies.

‘Eternal fountain’

For Herman it is concerning that the “debates” on forcing pension funds to invest have been around “for a long time, but they keep on coming back”.

“The proviso, though, is that borrowers need to show respect to investors via crystal-clear corporate governance and transparency, something the SOEs are not renowned for,” says Herman.

“The savings industry will invest vast amounts of money – more than the 10% quoted [by Ramaphosa] – into thoroughly governed development and infrastructure products, companies and vehicles. A restructured Eskom seems an unlikely candidate, though, as the original break-up into three has now become ‘divisionalisation’.”

For Herman this means “the deck chairs (sic) are just being reshuffled and potentially the bad characters will still be benefiting down the line, undermining any concept of developmental investment”.