The DA has asked the National Treasury to reject an ANC policy proposal that a portion of pension funds be prescribed for investment in developmental projects.
"Finance institutions should invest pension funds based on the prospective return for pensioners and should not be forced by government to invest in speculative projects," Democratic Alliance spokesman David Ross said on Wednesday.
This proposal could be seen as a tax on pension funds, he said.
"I have written to both the Minister of Finance Pravin Gordhan, and Mr Arthur Moloto of the Government Employees Pension Fund, to raise our concerns with regards to the proposals of prescribed investments for pension funds."
According to the ANC discussion paper on state-owned entities and development finance institutions, the state should "regulate a substantial part of retirement and life assurance funds to be invested in state-owned enterprise and/or development financial instruments".
The idea was that retirement fund resources be channelled into an institution such as the Industrial Development Corporation, which could provide "concessionary finance", or cheap money, to state-owned and private entities.
Should this proposal be implemented, it could reduce benefits for pension fund members. Investments at market-competitive rates did not require prescription, Ross said.
The purpose of retirement funds was only to help savers achieve comfortable retirements.
By doing this they channelled funds into projects that tended to have the most sustainable long-term growth prospects, thereby benefiting the entire economy.
"No prescription by government can possibly achieve a better outcome for pensioners or the economy," Ross said.
The savings industry had strong reasons for opposing the prescribed asset approach. These included that prescribed assets could undermine the value of members' and policy-holders' savings.
The policy interfered with the market by creating artificial distortions and negative perceptions. It also had a "crowding out" effect, where healthy competition was undermined through preferential regulatory treatment for state funds.
"In other words, the opportunity costs of such a move simply outweigh any potential benefits," Ross said.
"Instead, government needs to create the conditions to allow real market opportunities for equity investment, which are free from the interventionist hand of the state."