The Public Investment Corporation (PIC), which manages over R2 trillion in funds, is refuting claims circulating on social media that the Government Employee Pension Fund (GEPF) is facing insolvency risks, as a result of an alleged £158 billion (R3.3 trillion) legal claim against its portfolio of assets.

According to a PIC statement released on Monday, ‘Nedbank Private Wealth’, a Nedbank subsidiary previously affiliated with insurer Old Mutual, is alleged to have engaged in “bad business practices” in the UK and US, which led to the alleged legal claim. The PIC, on behalf the GEPF, is an investor in both Old Mutual and Nedbank listed shares.

The allegations further level that South African state pensions will cease to exist because of the legal claims, but the PIC has said there was “simply no factual or legal basis for these assertions”.

The PIC adds that Nedbank and Old Mutual have refuted the allegations.

Nedbank and Old Mutual are yet to comment.

The PIC emphasised that itself and the GEPF are connected to the allegations, with the aforementioned conclusions reached, solely because they are invested in Old Mutual and Nedbank.

“Old Mutual and Nedbank are limited liability companies. Therefore, the PIC’s exposure, acting on behalf of the GEPF, to any claims against Old Mutual and Nedbank, assuming they are legitimate, is limited to their shareholding only. This is the case with all investments in companies with limited liability, globally,” it explained.


The complaints have been submitted to and probed by several regulatory and investigative bodies in South Africa, the UK and US. “As far as the PIC is aware, none of the regulatory and investigative bodies have confirmed the veracity of these allegations,” it said.

The PIC added that the Financial Sector Conduct of South Africa moved to close the matter after soliciting and obtaining information relating to the complaint and, that this indicates that there is no merit to the allegations.

The probes follow United Democratic Movement president Bantu Holomisa questioning the veracity of the allegations in a letter addressed to Finance Minister Enoch Godongwana, PIC CEO Abel Sithole, and the GEPF’s principal executive officer.

In it, Holomisa refers to a letter sent to GEPF chairperson Dr Renosi Mokate in November last year, that questioned the alleged negligence of the PIC and failure to abide by risk identification laws, and thus the insolvency of the fund.

The PIC is unaware of the motive behind the allegations and has committed to engage “any legitimate authority that has been enjoined to consider the matter.”

“The PIC can only assure its clients and their beneficiaries, the public and other stakeholders that the allegations are false and that all its client assets are secure.”

PIC refutes government pension fund insolvency claims – Moneyweb