PDSnet Glossary

Term

Categories

Introductory Technical Fundamental Economics Opinion Sectors International Regulatory Other Markets

Versions

Name	synonyms = 1, variations = 2, abbreviations = 3

Publish: (0 = no, 1 = yes)

Definition

The government policy that a specific asset must be held by a retirement fund in terms of the law. This idea was introduced by the National Party in 1956 with the Pension Funds Act, to ensure that they had sufficient funds for major projects during the apartheid era. At its height institutions were required to invest up to 77% of their assets into government bonds and state-owned enterprises (SOE). The policy was abandoned in 1989. Today there are no prescribed assets, just a split of funds which is designed to ensure that pension funds and retirement funds are properly diversified. The ANC government has periodically mentioned re-introducing prescribed assets, but this has been strongly opposed. In its manifesto for the 2024 election the idea was again floated - and again had strong criticism from institutional fund managers. Prescribed assets mean that fund managers are forced to invest into assets which do not necessarily offer a market-related return. In August 2024 the head of the Financial Sector Conduct Authority (FSCA), Olano Makhubela, said that the FSCA was opposed to the idea of prescribed assets. The DA which is now a substantial member of the government of national unity (GNU) has always been opposed to prescirbed assets.

Edit Glossary Term