BusinessLive reports that investment analysts said on Tuesday that the Government Employees Pension Fund’s (GEPF’s) plan to move some of its investments offshore was warranted.  

But, it could impose additional strain on the rand and trigger more economic woes for the country.  Rowan Burger of Momentum Investments said the fund could get better returns from increased offshore exposure in the short to medium term, which was in line with its fiduciary duty to optimise returns for its members.  But, chief economist at Econometrix, Azar Jammine, said a sudden outflow of just a little of GEPF’s funds could be more devastating than even the impact of a credit downgrade.  "A Moody’s downgrade can trigger about R100bn to R150bn of capital outflows … if the GEPF moved just 20% of its funds offshore, we’d be looking at about R400bn in outflows," he stated.  With only 10% of the GEPF’s funds allowed for investment offshore, public servants have been distinctly disadvantaged compared to workers in the private sector, whose pension funds are allowed to invest up to 30% abroad, Jammine noted.  The GEPF, which manages more than R2-trillion of public servants’ retirement savings, said last week its plans for shifting some investments offshore were gaining traction.

• Read this report by Londiwe Buthelezi in full at BusinessLive

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