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South Africa: Pension Fund Report Shows Growth in 20 Years
Source: www.sanews.gov.za
Source Date: Friday, December 09, 2016
Focus: Institution and HR Management
Country: South Africa
Created: Dec 09, 2016

In the financial year 2015/16, the assets of the fund grew to over R1.6 trillion. The GEPF achieved an overall investment performance return of 4% during this time. This enabled the board to grant a pension increase of 5.3%, which was above 100% of the consumer price index (CPI) of 4.8%, as at November 2015. This is higher than the 75% increase recommended by the rules of the fund.
“The GEPF’s investment strategy uses a liability-driven approach that takes into consideration expected future benefit payments, the actuarial position, and other long-term objectives, as well as the risk to the overall solvency of the fund,” said Sithole.
The GEPF was established in 1996 when various public sector pension funds were amalgamated into one fund. In that year, the GEPF started out with assets under management of R127 billion, which has since increased to more than R1.6 trillion.
The GEPF is currently the single largest investor in the Johannesburg Stock Exchange (JSE) listed companies, with significant holdings in government bonds, listed equity, money markets, as well as investments in unlisted equity and property.
Accumulated assets have grown at an average rate of 12.09% over the past 10 years. This growth has been in tandem with an improvement in the GEPF’s funding level, an increase from 72% in 1996 to 100% in 2014 (according to the actuarial valuation of 31 March 2014).
“The GEPF is proud of this achievement as it is currently one of very few large defined benefit pension funds in the world which is 100% funded after the 2008/2009 financial crisis. This reflects the Fund’s robust investment strategy and its ability to adapt to dynamic and turbulent market forces”.
The total membership of the GEPF now stands at 1 693 078, consisting of 1 269 948 members who are still in service and 423 130 pensioners and beneficiaries.
“The good news is that the benefits paid decreased by R3 billion in the current year, mainly due to a decrease in resignations from the fund. Looking back at the achievements of the last 20 years, the GEPF will continue to ensure the financial security and strive for superior levels of service for its pensioners and members.
“It will be a catalyst for change in terms of securing investment opportunities locally, regionally, and globally to meet its pension liabilities,” said Sithole.
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