In this bulletin, we share an update regarding previous announcements around the proposed Regulation 28 changes which is currently being reported in the media.
Speaking at his State of the Nation debate in parliament recently, Deputy Finance Minister David Masondo mentioned that National Treasury is targeting to gazette the Regulation 28 amendments before the end of February 2022.
What are the key changes?
The amendments now clarify that the overall investment in infrastructure across all asset categories may not exceed 45% regarding domestic exposure and an additional limit of 10% in respect of the rest of Africa. As such, these changes will provide retirement funds more flexibility to invest in infrastructure and make a positive contribution towards addressing challenges in the current low economic growth climate.
What do the changes mean for the Fund?
As previously communicated, the EPPF noted that the proposed changes are not prescriptive but rather provide clarity on how retirement funds may invest in infrastructure investments. Retirement funds - such as the EPPF – will have to consider their own investment strategy and take into account the applicable risks and returns.
The Fund’s approach in investment decision making will not change. As it currently does, the EPPF will evaluate each investment opportunity taking into account the expected returns and applicable risks before deciding on investing with the interests of members, pensioners and beneficiaries being of paramount importance.
The EPPF is looking forward to the final version that will be finalized, upon which an updated communication will be issued.
Eskom Pension and Provident Fund