The Government Employees Pension Fund (GEPF) is pleased to announce its financial results for the year ended 31 March 2023.
Key Performance Indicators:
Investment portfolio increased by R27.1 billion to R2.32 trillion from the previous financial year
Investment market value increased by 1.2%
Return on Investment of 3.5%
Accumulated funds and reserves grew at an average annual rate of 6.65% for the 10-year period 2014-2023
Net investment income of R82.2 billion (interest income of R 56.7 billion, dividend income of R56.4 billion and property income of R 2.03 billion)
Member contributions of R83.1 billion • Benefits paid of R 137.4 billion
Benefits paid of R 137.4 billion
In a period of uncertainty including poor economic performances, globally and in South Africa, the financial year 2022/23 was a challenging year for investors around the world. Despite these challenges, the GEPF investment portfolio recorded growth of 1.2% to a market value of R2.32 trillion, the largest in its history. This represents a growth of R27.1 billion, a 3,5% return on investment. Net investment income for the year amounted to R 82.2 billion, derived largely from dividend income of R56 billion, interest income of R 56.7 billion and net profit on sale of investments of R22.2 billion.
The positive performance can be primarily attributed to the positive performance of bonds and the depreciation of the local currency. The GEPF’s 10-year annualised return was 6.65%, illustrating financial stability with a funding level of 110.1%.
The modest growth amidst the tough economic conditions illustrates that the Fund has been very resilient, and that the Fund’s investment strategies continue to protect the Funds’ assets. The investment for the financial year is satisfactory, noting the tough and volatile economic conditions that global and local investors faced. Staying the course and not panicking when faced with sudden market volatility remains a crucial aspect of GEPF’s strategy.
Active membership remained stable over the year, while pensioner membership steadily increased. Active membership increased from 1 261 363 in 2021/22 to 1 267 307 in 2022/23 and contribution income increased by 1.39% during the reporting period. The increase is mainly because of an increase in retirements, resignations, and child pensions, while funeral and death benefits decreased.
The number of pensioners increased from 322 223 in 2021/22 to 336 629 in 2022/23. The total value of gratuities paid was R22.3 billion and annuities paid was R70.4 billion. The Fund finalised 37 440 retirement claims compared with 33 627 in 2021/22, reflecting an increase of 11% in claims. Resignation benefits paid amounted R32,9 billion (2022: R33,8 billion), R9,8 billion (2022: R14,8 billion) was paid in death benefits and funeral benefits worth R416 million were paid (2022: R550,1 million). Spouses pension benefits to the value of R12.1 billion (2022: R11.5 billion) were paid to 171 592 beneficiaries (167 679 in 2021/22), and R948.8 million (2022: R551.4 million) was paid in child pension benefits to 15 809 qualifying children (2021/22: 9 824).
These figures illustrate the GEPF’s commitment to meet its financial obligations and pay benefits to its members, pensioners, and beneficiaries. The Fund remains cash flow positive with R53 billion as of 31 March 2023. This is largely attributable to benefits paid of R137 billion, net investment income received of R107 billion, and contributions received of R83 billion.
The GEPF revised the mandate agreement with the Public Investment Corporation (PIC) for listed and unlisted investments during the 2021/22 reporting period and the revised agreements were signed effective from 01 April 2022. The revised mandate seeks to strengthen governance over the execution of the investment strategy by the PIC (on behalf of the GEPF), create a more harmonious legal framework, improve the focus and implementation of investment guidelines, and introduce accountability mechanisms in case of poor investment decisions. There is a need for greater transparency and accountability in the relationship between the GEPF and the PIC.
Furthermore, the GEPF and its administrator, the Government Pensions Administration Agency (GPAA) are exploring different models and methods to improve the payment of benefits. Over the past financial year, several initiatives were launched to realise this goal, including enhanced collaboration with employer departments, labour unions and continuing member and beneficiary outreach initiatives.
The new GEPF Board was appointed in July 2022 and is committed to growing the Fund as well as ensuring that the Fund becomes more efficient and effective in benefits administration and its investment strategies.
/Ends
The Audited Financial statement can be reviewed on the GEPF website on gepf.datafree.co
Issued by Government Employees Pension Fund Media
Enquiries:
Matau Molapo
There is an old video from as far back as early 2020 that is recirculating on social media of the current mayor of Cape Town, Mr. Geordin Hill-Lewis, before he became the mayor, in which he states that the GEPF intends to bail out Eskom to the tune of R250 billion. The GEPF would like to provide some clarification regarding this matter for the benefit of GEPF members and pensioners.
The GEPF is guided by clear and transparent processes in line with the GEP Law and its investment strategy when undertaking investments on behalf of the Fund. Proposals have to be formally presented to the GEPF Board of Trustees, who then consider whether the proposed investments would ensure the sustainability of the Fund and provide reasonable financial returns for the GEPF.
In this regard, no proposal has been presented to the GEPF by any institution with regards to bailing out Eskom. This is therefore not a matter that is currently under consideration by the GEPF and its Board of Trustees. Should such a proposal be presented, the GEPF Board of Trustees will apply its mind in line with its mandate and fiduciary duties to ensure the sustainability of the Fund and accordingly take the most appropriate decision.
The Government Employees Pension Fund (GEPF) announced that an annual pension increase of 5.5% will be granted to its pensioners as at 1 April 2022.
This pension increase is based on the 5.5% inflation rate for the 12 months ending 30 November 2021 thus making the increase equal to 100% of Consumer Price Index (CPI) and higher than the 75% of Consumer Price Index (CPI) provided in terms of GEP Law and Rules.
Pensioners who retired on or before 1 April 2021 are to receive the full increase of 5.5 % as of 1 April 2022. Pensioners who retired after 1 April 2021 are to receive a proportionate increase based on the number of the months they have been in receipt of pension by 31 March 2022.
The GEPF has granted this increase to enable pensioners to keep up with rises in inflation. These increases are based on the affordability of the Fund at the given time. An affordable increase is one that can be granted without placing a strain on the sustainability of the Fund including current needs and future financial health of the Fund in order to continue paying benefits that are promised to our members.
When setting the pension increase, we consider:
the investment returns earned over the year,
the level of inflation over the same period,
how both relate to the assumptions adopted in the statutory valuations and more importantly,
how the increase will impact the financial position of the Fund.
It must be noted that increases which are above what is provided for in the GEP Law and Rules is granted at the discretion of the Board taking into account the Fund’s investment performance as well as GEP Law requirements.
Pensioners will receive individual letters illustrating the new values of their pensions as of 1 April 2022
Note to Editors
GEPF is governed by the Government Employees Pension (GEP) Law of 1996, as amended, and the rules that accompany it. These rules, along with GEPF’s Pension Increase and Funding Level policies, give firm guidelines on how the Fund must decide the annual increase that is paid to pensioners.
These documents state that GEPF’s Board of Trustees may approve a pension increase after consideration was given to the financial conditions of the Fund and the effect of the proposed increases on the Fund.
This minimum funding level states that the Fund’s assets must be able to cover at least 90% of its liabilities. This means that what the Fund owns (its assets) must be able to cover the cost of at least 90% of what it owes in terms of the current and future pension payments that it is committed to pay (its liabilities). According to the rules, the Fund may thus only approve an increase that it can afford.
For more information, please contact:
Matau Molapo,
GEPF Stakeholder Management and Communications Division
The Government Employees Pension Fund (GEPF) is pleased to announce its financial results for the year ended 31 March 2021.
Key Performance Indicators:
Market value of R2.09 trillion increasing by R451 billion from the previous financial year
The Fund reached the significant milestone of R2 trillion in its 25th year anniversary of its founding
Investment market value increased by 27.5%
Return on Investment of 23.1%
Accumulated funds and reserves grew at an average annual rate of 8.90% for the 10 year period 2012-2021
Net investment income of R 483.8 billion following benefit payments of R 110.6 billion
Member contributions of R82 billion
Despite the turbulent and unpredictable market conditions during the financial year, the GEPF recorded a market value of R2.09 trillion at the close of its financial year on 31 March 2021. This was an increase of 27.5% resulting in a return on investment of 23.1%. Over the 10-year period, 2012-2021, the GEPF’s accumulated funds and reserves grew at an average annual rate of 8.90%.
The growth in the value of assets under management (AuM) confirms that the GEPF’s investment strategy aimed at achieving long-term growth is successfully contributing to the financial soundness of the Fund.
This positive performance is as a result of a recovery of R451 billion in the Fund’s market value following a decline of 11.4 % (R260 billion) in the previous financial year where the Fund’s market value was R1.6 trillion.
The increase in the investment value is mainly attributable to the recovery in financial markets, particularly equities and bonds, from the market contraction in the first quarter of 2020. The Fund’s performance however was negatively impacted by its unlisted and property portfolios declining which bore the brunt of market conditions as a result of the impact of the Covid-19 pandemic on the economy.
In this regard, impairment provisions had to be made to reflect the business reality of an asset at a particular point in time. As a result, the GEPF implemented a very conservative valuation of its unlisted and property assets. Such a valuation approach was done fully aware that improved market conditions could see assets subsequently recover or even exceed the value of the original investment.
We have seen a reversal of R2.1 billion in some of our assets impaired in previous years. A further encouraging sign has been the decrease in the value of impairments from R11.9 billion as at 31 March 2020 to R7.4 billion at 31 March 2021.
Despite the tough Covid-19 operating environment, the total benefits paid by the Fund amounted to R 110.6 billion. Our pension administrator, the GPAA received 27 960 pension claims in 2020/21 compared with 34 134 in 2019/20, reflecting a decrease of 18% in claims. The retirement claims amounted to R76 billion compared to R69,1 billion in the previous year. The Fund’s active members decreased from 1 269 161 in 2019/20 to 1 265 406 in 2020/21. The number of pensioners in the Fund also declined from 313 173 in 2019/20 to 312 647 in 2020/21.
In an effort to enhance and strengthen our oversight and monitoring of the Government Pensions Administration Agency (GPAA) and the Public Investment Corporation (PIC), the GEPF has taken several steps during the financial year. These include:
A comprehensive review of the Fund’s investment policy, investment mandate and management agreements with the PIC. These include a more stringent consequence management, a review of the fee models and improved investment and reporting guidelines.
A review of the Fund’s operating model and quality of service provided by the GPAA. This review includes the benchmarking of administrative systems to meet the needs of the GEPF and its clients.
The GEPF continues to remain optimistic of the future growth of the Fund and we will continue to play our part in growing the South African economy.
/Ends
The Audited Financial statement can be reviewed on the GEPF website on gepf.datafree.co
The Government Employees Pension Fund welcomes the appointment of the new Public Investment Corporation (PIC) Board announced by Cabinet.
The GEPF chairperson, Dr Renosi Mokate, on behalf of the GEPF Board of Trustees and its Executive Committee congratulates the new Board on their appointment.
The GEPF wishes to thank the outgoing Board for its efforts in laying a foundation to strengthen the governance and reputation of the PIC, and is committed to working with the newly appointed Board in the continuation of this work.
The PIC‘s growth and integrity are crucial in the protection of the retirement benefits of GEPF members, pensioners and beneficiaries.
The Government Employees Pension Fund welcomes the appointment of Mr Abel Sithole as the new Chief Executive Officer of the Public Investment Corporation (PIC).
The GEPF chairperson, Dr Renosi Mokate, on behalf of the GEPF Board of Trustees and its employees congratulates Mr Sithole on his appointment and wishes him well at the PIC.
“We thank Abel for his hard work and dedication to the Fund and its stakeholders. He brought stability and direction to the GEPF at the time when stability was needed and we are assured that he will do the same at the PIC. This is not a goodbye but see you later, said Dr Mokate.
Referring to his appointment, Mr Sithole said, “I am honored to have served the GEPF and leave behind a strong organization and a great team which I had the privilege to lead.” The GEPF will in due course announce the process it will undertake to appoint its next Principal Executive Officer.
15 MARCH 2020
Fellow South Africans,
I am addressing you this evening on a matter of great national importance.
The world is facing a medical emergency far graver than what we have
experi-enced in over a century.
The World Health Organisation has declared the coronavirus outbreak as a
global pandemic.
There are now more than 162 000 people who have tested positive for the
coronavirus across the globe.
Given the scale and the speed at which the virus is spreading, it is now
clear that no country is immune from the disease or will be spared its
severe impact.
Never before in the history of our democracy has our country been
confronted with such a severe situation.
From the start of the outbreak in China earlier this year, the South African
gov-ernment has put in place measures to screen visitors entering the
country, to contain its spread and to treat those infected.
As of now, South Africa has 61 confirmed cases of people infected with the
virus, and this number is expected to rise in the coming days and weeks.
Initially, it was people who had travelled out of the country, especially from
Italy, who had positively tested for the virus.
It is concerning that we are now dealing with internal transmission of the
virus.
This situation calls for an extraordinary response; there can be no halfmeasures.
Cabinet held a special meeting earlier today.
After which, due to the serious measures we are going to announce, I have
consulted the premiers.
We have decided to take urgent and drastic measures to manage the
disease, protect the people of our country and reduce the impact of the
virus on our society and on our economy.
We have now declared a national state of disaster in terms of the Disaster
Management Act.
This will enable us to have an integrated and coordinated disaster
management mechanism that will focus on preventing and reducing the
outbreak of this virus.
We will also be able to set up emergency, rapid and effective response
systems to mitigate the severity of its impact.
Following an extensive analysis of the progression of the disease
worldwide and in South Africa, Cabinet has decided on the following
measures:
Firstly, to limit contact between persons who may be infected and South
African citizens
We are imposing a travel ban on foreign nationals from high-risk countries
such as Italy, Iran, South Korea, Spain, Germany, the United States, the
United Kingdom and China as from 18 March 2020.
We have cancelled visas to visitors from those countries from today and
previously granted visas are hereby revoked.
South African citizens are advised to refrain from all forms of travel to or
through the European Union, United States, United Kingdom and other
identified high-risk countries such as China, Iran and South Korea.
This is effective immediately.
Government will continue to regularly issue travel alerts referring to specific
cities, countries or regions as the situation evolves based on the risk level.
Any foreign national who has visited high-risk countries in the past 20 days
will be denied a visa.
South African citizens returning from high-risk countries will be subjected to
testing and self-isolation or quarantine on return to South Africa.
Travellers from medium-risk countries – such as Portugal, Hong Kong and
Singapore – will be required to undergo high intensity screening.
All travellers who have entered South Africa from high-risk countries since
mid-February will be required to present themselves for testing.
We will strengthen surveillance, screening and testing measures at OR
Tambo, Cape Town and King Shaka International Airports
South Africa has 72 ports of entry in the country which are land, sea and air
ports.
Of the 53 land ports, 35 will be shut down with effect from Monday 16
March.
2 of the 8 sea ports will be closed for passengers and crew changes.
Effective immediately, all non-essential travel for all spheres of government
outside of the Republic is prohibited
We further discourage all non-essential domestic travel, particularly by air,
rail, taxis and bus.
Secondly, it is essential therefore that we minimize the risk of the spread of
this virus by limiting contact amongst groups of people.
While we appreciate the economic, religious, and cultural significance of
social and community gatherings, the coronavirus is spread through
contact between persons.
As we have said before, the current circumstances require extraordinary
measures to curb the spread of infections. Countries that have heeded the
call to implement these radical measures, have fared much better than
those than do not.
Therefore to encourage social distancing Cabinet has decided on these
additional measures:
Gatherings of more than 100 people will be prohibited.
Mass celebrations of upcoming national days such as Human Rights Day
and other large government events will be cancelled.
Where small gatherings are unavoidable, organisers will need to put in
place stringent measures of prevention and control.
Schools will be closed from Wednesday, 18 March, and will remain closed
until after the Easter Weekend.
To compensate, the mid-year school holidays will be shortened by a week.
Government is working closely with colleges, universities and other public
facilities such as Parliament, prisons, police stations and military
installations to intensify hygiene control.
Visits to all correctional centres are suspend for 30 days with immediate
effect.
Government is aware of the confirmed case of a student who has tested
positive for the coronavirus at Wits University.
Those who have been in contact with the student will be quarantined.
The Minister of Higher Education, Science and Innovation is consulting with
vice chancellors of universities and colleges across the country and will
soon be announcing measures in this regard.
We call on all businesses including mining, retail, banking, farming to
ensure that they take all necessary measures to intensify hygiene control.
We also call on the management of malls, entertainment centres and other
places frequented by large numbers of people to bolster their hygiene
control.
Thirdly, to further strengthen our health response:
Government is strengthening its surveillance and testing systems.
We are in process of identifying isolation and quarantine sites in each
district and metro.
Capacity is being increased at designated hospitals in all provinces.
We are also increasing the capacity of existing contact tracing processes.
We are partnering with the private sector to set up a national tracking,
tracing and monitoring system of all people infected with the coronavirus
and those they have been in contact with
We are undertaking a mass communication campaign on good hygiene
and effective prevention behaviour.
Therefore, we are calling on everyone to:
• Wash their hands frequently with soap and water or hand sanitisers for at
least 20 seconds;
•
•over their nose and mouth when coughing and sneezing with tissue or
flexed elbow;
•
•Avoid close contact with anyone with cold or flu-like symptoms.
In essence, we are calling for a change of behavior amongst all South
Africans.
We must minimise physical contact with other people, and, encourage the
elbow greeting rather than shaking hands.
Because of the severity of this virus and its rapid spreading, government
will make funding available to capacitate the sectors dealing with the
national response to the Coronavirus outbreak.
Since the outbreak of this pandemic, our government’s response has been
led by an Inter-Ministerial Committee, chaired by the Minister of Health, Dr
Zweli Mkhize.
We congratulate them on the outstanding work they have done – together
with their able support teams – to steer our country through this challenging
and un-certain period.
As part of the intensification of this effort, we have decided to establish a
National Command Council chaired by the President.
This Command Council will include, amongst others, members of the Inter-
Ministerial Committee and will meet three times a week, to coordinate all
aspects of our extraordinary emergency response.
My fellow South Africans,
In addition to the impact that this pandemic will have on health and wellbeing
of our people, and the impact it will have on the day-to-day life of our
society, COVID-19 will also have a significant and potentially lasting impact
on our economy.
In the last few weeks, we have seen a dramatic decline in economic activity
in our major trading partners, a sudden drop in international tourism and
severe instability across all global markets.
The anticipated effects of the decline in exports and tourist arrivals will be
ex-acerbated by both an increase in infections and the measures we are
required to take to contain the spread of the disease.
This will have a potentially severe impact on production, the viability of
businesses, job retention and job creation.
Cabinet is therefore in the process of finalising a comprehensive package
of interventions to mitigate the expected impact of COVID-19 on our
economy.
This package, which will consist of various fiscal and other measures, will
be concluded following consultation with business, labour and other
relevant institutions.
It is clear that this disease will be extremely disruptive.
Our priority must be to safeguard the health and well-being of all South
Africans, to minimise the number of infections and to ensure all those
infected get proper treatment.
While we are battling a contagious virus, perhaps the greatest dangers to
our country at this time are fear and ignorance.
We must appreciate the extent of the threat that this disease presents, we
must accept the anxiety that it causes, but we cannot allow ourselves to be
overwhelmed by fear and panic.
We should stop spreading fake and unverified news and create further
apprehension and alarm.
While we are facing a medical emergency far graver than we have
experienced in recent times, we are not helpless.
We have the knowledge, the means and the resources to fight this disease.
If we act swiftly, with purpose and collectively we can limit the effects of the
coronavirus on our people and our country.
Although we may be limiting physical contact, this epidemic has the
potential to bring us closer together.
We are responding as a united nation to a common threat.
This national emergency demands cooperation, collaboration and common
action.
More than that, it requires solidarity, understanding and compassion.
Those who have resources, those who are healthy, need to assist those
who are in need and who are vulnerable.
All the institutions of the state will be mobilised to lead this effort, but, if we
are to succeed, every company, trade union, NGO, university, college,
school, religious group and taxi association will need to play its part.
We thank those people who suspected they may have been exposed to the
virus for coming forward to be tested and for taking measures – such as
self-isolation – to prevent further transmission.
We thank the medical teams around the country who are leading our
response and are putting the well-being of others ahead of the risks they
face themselves.
On Saturday we welcomed 104 of our compatriots who were in Wuhan City,
China.
We thank the repatriation team for the task they performed with pride and
efficiency to return them to the country and ultimately to their families.
The repatriation has been successful and those who have returned have
settled in the quarantine area.
We thank the military health officials, pilots, cabin crew and all those who
participated in this exercise.
We thank the leadership and the people of Polokwane and Limpopo for
warmly welcoming our fellow South Africans.
We also extend our gratitude to the staff and management of the Ranch
Hotel who have accommodated our compatriots and also subjected
themselves to quarantine.
We extend our appreciation too to the companies, organisations and
individuals who have taken it upon themselves to disseminate information
about this virus and to raise awareness.
We thank those businesses that have taken steps to protect their
employees, and those unions that have taken steps to protect their
members.
Ministers who are at the frontline of coordinating our response to this crisis
will be briefing the nation tomorrow, where they will unpack details in
relation to the measures we announced tonight.
Fellow South Africans, this is the most definitive Thuma Mina moment for
our country.
I have great trust that our people will respond positively to this call to
common action.
Fellow South Africans,
This epidemic will pass.
But it is up to us to determine how long it will last, how damaging it will be,
and how long it will take our economy and our country to recover.
It is true that we are facing a grave emergency.
But if we act together, if we act now, and if we act decisively, we will
overcome it.
I thank you.
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