OFFICE CLOSURE NOTICE

NoticesBy admin

Dear Members

Please note that all GEPF regional offices and the call centre will be closed from 23 December 2022 – 3 January 2023

Note that from 3 January 2023, clients can call the call centre on 0800 117 669 or email enquiries@gepf.co.za

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Bloemfontein Office Closed

NoticesBy admin

Dear Members

Kindly note that the GEPF office is temporarily closed since this morning due to water leakage covering the floor including passages outside the office.

Please accept our sincere apologise for any inconveniences that this may cause. For enquiries please call our call centre on 0800 117 669 or email enquiries@gepf.co.za

Kind Regards
GEPF

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THE GOVERNMENT EMPLOYEES PENSION FUND (GEPF) TO IMPLEMENT REVISED ACTUARIAL FACTORS FOLLOWING STATUTORY ACTUARIAL VALUATION

GEPFNewsBy admin

MEDIA RELEASE

26 October 2022, Pretoria

The GEPF will from 1 November 2022 implement its revised actuarial factors. This follows the 31 March 2021 statutory actuarial valuation report of the Fund. The actuarial interest factors are updated in line with any changes to the assumptions used at each statutory actuarial valuation of the Fund. The current actuarial interest factors are based on the 31 March 2018 statutory valuation, which was implemented with effect from 1 July 2019 to date.

The implementation of the revised factors follows the completion of a consultation process with labour organisations as required by the Government Employees Pension Law, 1996. The GEPF is required to consult with public sector labour unions concerning the calculation of actuarial interest factors which are determined when the Fund undertakes a statutory valuation.

Actuarial interest factors are used to determine the actuarial interest benefits which represent the value of a member’s benefit in the Fund, as outlined in the GEPF Rules.

Payment of a member’s actuarial interest occurs on resignations or other exits from the Fund where members have less than 10 years of pensionable service. The factors are mainly driven by how future salaries and pensions are expected to increase as well as the level of returns that the Fund’s investments are expected to earn in the long term. These drivers are referred to as economic assumptions.

The economic assumptions are based on market conditions as at the valuation date. The gap between the returns that the Funds’ investments are expected to earn in the long term (discount rate) and the salary/pension increase assumptions is what affects the factors the most. The higher this gap is, the lower the actuarial factors will be.

The gap between the returns that the Fund’s investments are expected to make in the long term and the rate at which salaries and pensions are expected to grow in the long term was higher in the 2021 statutory actuarial valuation than in the previous valuation of 2018. The revised factors result in actuarial interest values that are on average 14% lower than those that would result from the 2018 factors. The extent to which individual members’ actuarial interest factors will differ between the 2018 and 2021 factors depends on their age and category (i.e., whether they are Service members or not).

A common misconception from members is that a reduction in actuarial factors is a reduction in the guarantees promised to them by the Fund. This however is not correct. The actuarial interest factors do not change the benefit promised by the Fund upon retirement. The Fund guarantees the pension benefits payable in retirement. The value today of these future pension benefits cannot be guaranteed as this depends on the economic conditions and expectations at each point in time. Actuarial factors reflect the value of these guaranteed future pensions in today’s terms. These factors, therefore, change when market expectations about the future are adjusted at each valuation date.

Failure of the Fund to implement the revised factors would result in exiting members being paid more than their fair share of the Fund’s assets thereby disadvantaging members who remain in the fund and ultimately those that retire with the Fund.

The changes to the actuarial factors will affect all resignations and other exits where members have less than ten years of pensionable service from 1 November 2022.

In summary, the 2021 actuarial factors have reduced from the 2018 factors. The factors are lower due to the changing economic assumptions adopted for the 2021 statutory actuarial valuation. As a result, changing the assumptions ensures the GEPF’s assets and liabilities are matched and that members get paid their fair share of benefits and no one is disadvantaged.

Issued by Government Employees Pension Fund

For more information please contact: Matau Molapo, Communications

T: +27 (0) 12 424 7315

M: +27 (0)79 1910 757

E: Matau.molapo@gepf.co.za

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The GEPF continues positive growth with a 9.6% year-on-year growth with record market value of R2.3 trillion

GEPFNewsBy admin

MEDIA RELEASE
20 October 2022, Pretoria

The GEPF continues positive growth with a 9.6% year-on-year growth with record market value of R2.3 trillion

The Government Employees Pension Fund (GEPF) is pleased to announce its financial results for the year ended 31 March 2022.
Key Performance Indicators:

      • Market value of R2.3 trillion increasing by R 201 billion from the previous financial year
      • Investment market value increased by 9.6%
      • Return on Investment of 11.1% for the financial year
      • Accumulated funds and reserves grew at an average annual rate of 8.6% for the 10-year period 2013-2022
      • Net investment income of R255.7 billion
      • Member contributions of R82 billion
      • Benefits paid of R136 billion

Despite the Fund operating in tough economic conditions, the GEPF achieved a 9.6% year on year growth, closing with the highest market value in its history of R2.3 trillion in the 2021/22 financial year, an increase of R 201 billion from the previous financial year. This increase resulted in a return on investment of 11.1% realising a net investment income of R255.7 billion. During the 10-year period, 2013-2022, the GEPF’s accumulated funds and reserves grew at an average annual rate of 8.60%.
This continued growth of the Fund irrespective of the prevailing difficult economic conditions clearly indicates that the Fund’s long-term investment strategies continue to assist in growing the Fund. The improved return was largely because of positive domestic market conditions, particularly equities growth, rising commodity prices and the performance of our Bond portfolio which improved by 6% from the previous financial year.

There was a recovery in the Fund’s unlisted and property portfolios. The GEPF continues to strengthen its oversight and strategies with respect to these portfolios to further improve their performance. It is however important to note that the long-term impact of the COVID-19 pandemic will continue to impede these portfolios.

According to the GEPF’s 2021 statutory actuarial valuation, the Fund is financially sound, reflecting a funding level of 110.1% to meet its current benefit obligations to members. It is an improvement when compared to the funding level of 108.3% reflected in the previous valuation which was done in 2018.
Notwithstanding the tough operating environment, total benefits paid by the Fund in the financial year under review amounted to R136 billion. Our pension administrator, the GPAA, paid 499 726 pensions compared to 479 483 in the 2020/2021 financial year, reflecting an increase of 4%. It processed and finalised 33 627 retirement claims compared with 27 960 in 2020/2021, reflecting an increase of 20.3%. Gratuities paid amounted to R21.4 billion compared to R19.7 billion in financial year 2020/21. Monthly annuities paid amounted to R62.3 billion compared to R56.3 billion in the previous period. Active members decreased from 1 265 406 in 2020/2021 to 1 261 363, a minimal decrease of 0.3%.

In an effort to further strengthen and enhance our investment processes, including oversight of the Public Investment Corporation (PIC), GEPF implemented the following including recommendations made by the Judicial Commission of inquiry into allegations of impropriety at the PIC (the Mpati Commission);

      • The Fund’s investment policy was reviewed and strengthened;
      • Implementation of a revised strategic asset allocation following the evaluation of the Fund’s investment strategy and an asset liability modelling exercise;
      • Agreement has been reached with the PIC on benchmark returns which has resulted in a revised mandate being signed for the listed and unlisted portfolios;
      • In enhancing monitoring and evaluation of investments, the Board approved a revised internal investment monitoring structure to strengthen oversight and monitoring capacity;

The goal to improve benefits administration continues to be a key strategic objective for the GEPF. A key concern in this regard is the late payment of benefits by the Government Pensions Administration Agency (GPAA). Consequentially, the Fund reviewed and strengthened its service level agreement (SLA) with the GPAA as well as started a process of reviewing its operating model with GPAA, aimed at improving service delivery to our members, pensioners and beneficiaries.

The newly appointed GEPF Board 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. The outlook for the GEPF remains positive regarding South Africa’s prospects and we believe that teamwork and determination will take us to greater heights than before.
/Ends
The Audited Financial statement can be reviewed on the GEPF website on www.gepf.co.za
Issued by Government Employees Pension Fund

For more information please contact:
Matau Molapo, Communications
T: +27 (0) 12 424 7315
M: +27 (0)79 1910 757
E: Matau.molapo@gepf.co.za

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