Why workers cannot afford to be spectators in the PIC

Share current article via Email Share current article via Facebook Share current article via Twitter Share current article via LinkedIn Cosatu's upcoming national congress may ignite crucial talks on worker ownership and pension transparency; the writer encourages workers to demand transparency about how their money is invested by the PIC. File picture: Story audio is generated using AI The forthcoming Cosatu national congress could provide an important platform for beginning a serious conversation about worker ownership, pension governance and the accountability of the institutions managing workers' capital. The most troubling feature of the current Public Investment Corporation (PIC) controversy may not be the resignations, the disputes between board members and the shareholder minister, or even the competing interpretations of the PIC's governance framework. It is how little the workers whose money is being managed appear to feature in the public debate. The PIC manages almost R4-trillion in assets. Behind those numbers are millions of workers and beneficiaries whose retirement security depends on the prudent management of their accumulated savings. Yet much of the discussion about the PIC is conducted as though it were an internal dispute between politicians, lawyers, board members, executives and businesspeople. Workers are treated as spectators. They should not be. The PIC's money is not simply another pool of state money. It represents the accumulated wealth of workers and the future retirement security of millions of South Africans. That should make the governance of the PIC a matter of intense worker interest. Unfortunately, worker activism around pension assets remains relatively weak compared with Canada, Australia and Denmark. Workers are understandably preoccupied with wages, employment, working conditions and the immediate pressures of daily life. Pension investments can appear distant and technical. Questions about asset allocation, unlisted investments, investment mandates, board appointments and governance structures can seem like matters best left to professionals. That is a mistake. A pension fund is deferred wages. The money being invested today represents income that workers have earned but have agreed to receive later in life. Decisions about that money therefore deserve the same level of attention that workers give to their wages and working conditions. The PIC should be understood in precisely these terms. The recent controversy demonstrates why. Much of the debate has focused on personalities: who the whistleblower report was directed to, who resigned, who was suspended, who supported whom, who had authority to make a particular decision and whether the proper governance procedures were followed. Those questions are important, but they are not the whole story. The bigger question is: who has influence over workers' capital? The PIC inevitably attracts powerful interests. Businesses want capital. Investment managers want mandates. Some businesspeople work with and have relationships with executives and politicians within and outside the state. The shareholder has legitimate oversight responsibilities. Board members and executives exercise substantial institutional power, which is often co-opted by external actors. Wherever there is a large concentration of capital, there is also a risk of undue influence. The answer cannot be to remove the PIC from the market. The institution must invest. It must engage businesses, investment managers and other market participants. The answer is to ensure that those relationships do not become mechanisms through which investment decisions are captured. This is where workers have a vital role. Workers should demand transparency about how their money is invested. They should ask how boards are appointed and held accountable. They should insist that investment decisions are made according to clearly defined criteria. They should demand that conflicts of interest are disclosed and managed. They should expect whistleblower allegations to be taken seriously and investigated fairly. And they should refuse to be divided and a shareholder to decide who their representative should be. They should ask their representatives in organised labour a simple question: What are you doing to protect our pension capital? The labour movement has historically understood the importance of collective organisation in the workplace. The same principle should apply to workers' capital. A worker who negotiates collectively for better wages but pays little attention to the management of their pension savings is protecting only part of their economic future. Over a working lifetime, pension contributions can accumulate into substantial amounts. The investment returns on those contributions can determine whether a worker retires with financial security or financial vulnerability. That makes pension governance an economic struggle. The labour movement should therefore begin treating pension assets as part of its broader programme of worker empowerment. This does not mean that unions should dictate individual investment decisions. Nor does it mean that investment professionals should be replaced by mere political representatives. It means that workers must demand accountable institutions and informed representation. The institutional independence at the PIC matters so much. The board must be able to exercise its responsibilities without undue political or commercial pressure. Management must be accountable for investment decisions. The shareholder must exercise legitimate oversight without turning oversight into operational interference. And workers must be able to hold all of them accountable. The Mpati commission provided important lessons about the need to strengthen the governance of the PIC and address the concentration of power and potential conflicts within the institution. Those lessons should not be treated as another report to be filed away. They should become part of a broader conversation about who controls workers' capital. The recent whistleblower controversy provides another lesson. Some have argued that whistleblower allegations should have been ignored because the PIC is systemically important and because the allegations may have emerged in the context of commercial disputes between Acapulco and Harith in which the PIC CEO is alleged to have been conflicted. But the PIC's systemic importance is precisely why credible allegations must be assessed. Ignoring allegations can create the perception that an institution is unwilling to confront wrongdoing or is protecting powerful interests. That can damage institutional credibility and investor confidence. The appropriate question is not whether allegations should be believed automatically. They should not. Nor should allegations be dismissed automatically because of who raised them. The question is whether they deserve to be investigated through a fair, independent and properly governed process. Workers should demand nothing less. There is also an important lesson in the disputes surrounding senior appointments at the PIC. Appointments are not merely administrative matters when they determine who controls the allocation of enormous pools of capital. The debate over the chief investment officer (CIO) function was therefore about more than individual candidates. The restructuring of the CIO function was intended to address concerns about the concentration of investment authority and to align the institution with principles emerging from the Mpati commission. The broader principle is that the allocation of investment power must be structured to reduce the possibility of undue influence. That is a workers' issue. If workers are serious about protecting their retirement savings, they must become more active participants in the institutions that manage those savings. This is where organised labour has an opportunity. The labour movement should not see the PIC merely as another institution of the state. It should see it for what it is: an institution managing the accumulated wealth and future retirement security of millions of workers. Worker activism around pension assets should therefore become a permanent feature of South Africa's labour politics. Workers should know where their money is invested. They should understand who makes the investment decisions. They should know how those decision-makers are appointed and held accountable. They should demand transparency when things go wrong. The ultimate safeguard of workers' money cannot be institutional design alone. It must also be worker power. Masondo is the former PIC board chairperson Sowetan