Public servants' pension funds safe: GEPF

Friday, August 3, 2018

The Government Employees Pension Fund (GEPF) has assured public servants that their benefits are guaranteed.

“The benefits that we promise to members is according to what’s in the law. In our case… it means that [members’ benefits] are guaranteed,” said GEPF Principal Executive Officer Abel Sithole at the National Press Club on Thursday.

The GEPF has about 1.3 million active members and more than 400 000 pensioners and beneficiaries.

According to the GEPF 2017 annual report, the fund invests in a combination of investments that seek growth such as equities and property, and those that are designed to reduce risk, such as bonds and cash.

“The GEPF also makes unlisted investments across different asset classes. The reason for making these investments is twofold.

“Firstly, as a large institutional investor, investment in unlisted entities provides a degree of diversification to the GEPF’s portfolio. Secondly, it increases the opportunity set and allows the GEPF to make investments that fit within the fund’s developmental investment policy,” the report said.

According to the report, in the year under review, the GEPF made an allocation of R70 billion to the Public Investment Corporation (PIC) for developmental investments.

“As of 31 March 2017, the market value of the fund was R1.67 trillion, 2.6% higher than the market value of R1.63 trillion at 31 March 2016.

“For the one-year period ending 31 March 2017, the fund produced a return of 4.3%, outperforming its strategic benchmark return of 3.7%,” the report said.

The GEPF said the investment performance was achieved in a period of low economic growth, volatile financial markets and with inflation at 6.3% year-on-year, slightly higher than the South African Reserve Bank’s Consumer Price Index (CPI) target range of 3% to 6%.

The fund has set aside 5% of the total portfolio for developmental investments, which are investments in South Africa and the rest of Africa that deliver both a financial and social return.

“During the year under review, the GEPF’s investments facilitated in excess of 83 523 direct jobs, of which 76 110 were permanent and 7 413 temporary jobs. These included employment opportunities for more than 14 830 youth and 182 disabled individuals.

“Most of the temporary jobs were created in infrastructure development and investment in the agricultural sector, which relies largely on seasonal workers,” the report said.

During the financial year, the GEPF’s investments facilitated the support of the 543 small and medium enterprises (SMEs) in different sectors, resulting in the creation of more than 15 000 jobs.

“Through the PIC, the GEPF has facilitated 14 direct investments in renewable energy projects, creating a total of 904.29 MW. The GEPF’s investments include projects for solar and wind powered electricity generation,” the report said.

Payment of benefits 

Sithole said delays in paying out benefits to members who have retired are caused by the dispute of the years of service and the contributions that have been made, as it relates to the members’ salaries.

This happens in instances when the transition of an employee, who moves from one department to another, is not managed properly.

Sithole said there are initiatives that the GEPF is working on to correct members’ records.

“We are hoping that people come forward before the time because most people only know it when it happens. They do not know that the problem exists. We are trying to identify the problem ahead of time so that we can resolve it with the employer.

“The other issues that may create delays are tax problems. We do not pay if the taxman is not happy. If the taxman has not gotten their share, we will not pay,” he said.

Sithole said when people die, the delay is caused by the dispute of who must get the money.

“The majority of our members make a number of mistakes. They do not share the information about the benefits they have,” he said. –