Thousands of South African pensioners could be losing out as billions in public pension funds are wasted on risky and politically influenced investments.
A group called the Association for Monitoring and Advocacy of Government Pensions (AMAGP) has raised the alarm about how state pension funds are being used. AMAGP represents more than 8,000 retired government workers and is fighting to protect their hard-earned pension money.
Daybreak Farms: A Costly Investment Gone Wrong
According to AMAGP spokesperson Zirk Gous, over R33 billion of pension money has already been lost. A large part of this is tied to the Daybreak poultry farm, a company that the Public Investment Corporation (PIC) bought for R1.2 billion in 2015 on behalf of the Government Employees Pension Fund (GEPF).
From the start, this deal faced a lot of criticism. Poor management and lack of accountability led to major problems. By May 2025, Daybreak was in such bad shape that it had to enter business rescue, similar to bankruptcy.
“They couldn’t pay their workers or service providers. People were angry and lost jobs,” said Gous. “It’s a disaster caused by bad decisions and no responsibility.”
The Isibaya Fund: More Red Flags
Daybreak is not the only failed investment. Gous says there are even bigger issues with the Isibaya Fund, which is also run by the PIC. The fund is supposed to support job creation and transformation in South Africa by investing in certain projects, especially those aligned with Black Economic Empowerment (B-BBEE).
While these goals sound good, Gous warns that many investments under Isibaya are risky and politically motivated, not financially sound.
“The GEPF manages R2.3 trillion of pension money,” Gous explained. “But they’re putting large amounts into unlisted, unstable companies that are often connected to politics.”
A report found that 44% of Isibaya’s investments are either failing or at serious risk. In just the past two years, more than R6 billion has been written off due to failed projects – most of them under the Isibaya Fund.
Billions Written Off and No Accountability
Gous said this kind of financial mismanagement shows how broken the system is. In fact, according to a report presented to Parliament in 2016, R44 billion was already invested in politically connected projects — and nearly half of them failed.
Since 2015, a total of R52 billion has been written off. Of that, R31 billion was lost through Isibaya investments alone. That’s about 3% of all pension funds, and while 1% loss might be acceptable in normal investing, 3% is considered extremely high and dangerous.
“If you were investing privately, this would never be allowed,” said Gous. “This is pension money we’re talking about. It’s not theirs to risk like this.”
Who’s Really in Control?
Gous also raised serious concerns about who has the final say in these investments. He pointed out that the Minister of Finance approves all major investment decisions. This opens the door to political misuse of pension money.
“When pension funds are used for political reasons instead of financial ones, it’s a serious problem,” he said.
He accused the Minister of Finance, the GEPF board, and the PIC board of putting politics before pensioners, violating their fiduciary duty — the legal responsibility to act in the best interests of pension fund members.
What Can Be Done?
Despite the huge losses, the GEPF is still financially stable for now. That means pensioners will continue to get their monthly payments — but only if this trend doesn’t continue.
Recovering the lost R33 billion is uncertain. Gous explained that in the end, South African taxpayers might have to cover the shortfall, which could result in higher taxes to fix the gap.
“If we don’t act now, this could cost every taxpayer in the country,” he warned.
To prevent more losses, Gous believes that changes must be made to the laws that govern how the PIC operates.
He pointed to the Mpati Commission, which already recommended removing political control from the PIC. One clear suggestion was that the Deputy Minister of Finance should not be the chair of the PIC board — but this was completely ignored.
Final Words
AMAGP is now considering legal action and pushing for new laws to protect pensioners’ money.
“The only way to fix this is to take back control from politics,” Gous said. “We need proper reforms so this never happens again.”