Risk Management Improvement Project
Establishment Of A Panel Of Suitably Qualified Service Providers For The Provision Of Audit And Forensic Services For A Period Of Three (3) Years
Appointment Of A Service Provider To Conduct An Assurance Engagement In Accordance With International Standards On Assurance Engagements (Isae 3402) For A Period Of Three Years
The following criteria are used:
The PIC’s investment policy is determined by the mandates we receive from our clients and its implementation is overseen by the Board of Directors.
Clients can approach the Financial Sector Conduct Authority (FSCA), which has mechanisms in place to investigate complaints about any registered financial services provider.
Workers have a say in how the money is managed by virtue of their trade union membership. For instance, in the case of the GEPF board of trustees, trade unions are represented on a 50-50 basis with employer representatives. This means that trade unions are part of the process of setting the mandate provided to the PIC. In addition, PIC also engages trade unions and other social representatives from time to time so that we can better understand the needs of our clients.
Yes, clients pay management fees to PIC for our services. The fee structure is agreed on in negotiations between PIC and our clients. Generally, PIC fees are significantly lower than prevailing market rates.
Yes, if the PIC Board of Directors authorises a dividend payment and the Minister of Finance, as Shareholder representative, approves it.
PIC has regular interaction with the Shareholder on issues as decided by the Board and the Shareholder from time to time.
No, all Assets under Management (AuM) belong to PIC’s clients and may not be used for any purpose other than to benefit clients. The Shareholder is only entitled to dividend payments, which must first be authorised by the PIC Board of Directors and approved by the Minister of Finance.
The Shareholder has given certain guarantees regarding the Government Employees Pension Fund (GEPF), which is PIC’s largest client. This is because the GEPF is a defined benefit pension fund, meaning that its members are entitled to their benefits regardless of the performance of PIC in managing their funds. In the event of a shortfall between the defined benefits and available funds, the Shareholder guarantees to bridge the shortfall.
The PIC is a public sector institution, wholly owned by the South African government with the Minister of Finance as the Shareholder representative. However, the PIC is not a government department but a corporation with its own Board of Directors, which is responsible for controlling the PIC’s business and operations. The Board has a high level of autonomy, as outlined in the Public Investment Corporation Act of 2004 and as contemplated in the Companies Act of 2008.
Yes. The PIC is registered with the Financial Sector Conduct Authority (FSCA).
There are a number of requirements, some of the most important being:
At the end of the PIC’s financial year on 31 March, our annual financial statements are submitted to the Auditor-General for auditing, with the aim of verifying that the PIC’s spending is fair, reasonable and authorised. The Auditor-General’s opinion of the annual financial statements is tabled before Parliament as part of the PIC’s integrated annual report. This report must be tabled within five months of the financial year-end, in accordance with the Public Finance Management Act.
PIC only manages funds deposited by public sector clients. However, not all public bodies are PIC clients. For example, we do not manage the pension funds of municipal/local government employees, as these are managed by private sector fund managers. PIC’s founding Act, the Public Investment Corporation Act of 2004 does empower the corporation to approach these entities and provide asset management service on their behalf.
PIC uses a combination of internal and external fund management, as follows:
tender processes are used to select external fund management companies that,
once appointed, are expected to meet specified performance standards and