PIC/GEPF statement following a meeting on Steinhoff

The Investment Committee of the Government Employees Pension Fund (GEPF) and the Public Investment Corporation (PIC) held a meeting yesterday to discuss the recent developments regarding Steinhoff. It is important to note that notwithstanding the collapse in the Steinhoff share, the GEPF portfolio remains financially healthy, because of its diversified nature. It is also important to note that GEPF members’ benefits will not be changed by these developments, given that the GEPF is a defined benefit pension fund. The investment loss recorded was 0.6% of the total GEPF portfolio on 6 December 2017. Despite the fall in Steinhoff share, the total GEPF equity portfolio had created a value of approximately R140 billion over the preceding 12 month period, and had performed better than the equity benchmark. Albeit a relatively small reduction in the total portfolio, and despite the signs of recovery in the share price this week, the PIC and GEPF remain deeply concerned about Steinhoff. 

GEPF and PIC agree that the recent developments point to serious governance challenges at Steinhoff and that the following steps are necessary to secure the GEPF’s interest in the company: 

1. GEPF and PIC will insist on the appointment of at least two independent non-executive directors on the Steinhoff and Steinhoff Africa Retail (STAR) boards. 

2. GEPF and PIC will highlight their discomfort with the lack of independence of the Board, including the possible conflict of interest by Dr Christo Wiese as interim Chief Executive Officer. Furthermore, the GEPF and PIC will express their concern about the Steinhoff Audit Committee concluding the terms of reference of the investigations independently. 

3. GEPF and PIC will insist on representation on the Board Committee tasked with investigating the Steinhoff situation, so as to ensure that the process is transparent and that, amongst other matters, the terms of reference address critical governance issues. 

The GEPF and PIC believe that now, more than ever, the Steinhoff matter makes a case for the need to rotate auditors and long-serving board members in investee companies, an issue that the PIC has continuously raised. 

The PIC would like to state that it has engaged with Steinhoff consistently but has often not received positive feedback from the company. Specifically, the PIC has previously pointed out structural issues relating to the material shareholding of the Steinhoff and Wiese families, which are perceived to create the dominance of controlling shareholder representatives on the Board and as a result, potential conflicts of interest. 

The PIC has also raised concerns about the absence of a clear assessment of the risks introduced by the Steinhoff group’s acquisitive strategy as the company has become progressively complex. 

Whilst the PIC has tried to use its position as a major shareholder to vote against some of the resolutions tabled at Steinhoff annual general meetings, the reality is that the PIC is only one amongst many shareholders who have voted differently on certain resolutions. 

The PIC, on behalf of the GEPF will continue to raise environmental, social and governance issues in all its investee companies for the benefit of their stakeholders. 

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Preliminary List of Candidates 2018

GEPF PENSIONER MEMBER TRUSTEE ELECTIONS 

PRELIMINARY LIST OF CANDIDATES – 16 JANUARY 2018 

Below is a Preliminary List of Candidates for the GEPF Pensioner Member election for objection purposes. Objections must be submitted in writing to the Returning Officer via the following: 

FAX: 086 428 1356 | EMAIL: elections@gepf.co.za 

THE CLOSING DATE FOR OBJECTIONS IS 21:00 ON 19 JANUARY 2018 

1 BUSO LUTHANDO GILBERT 

2 CHABALALA RISIMATI WILLIE 

3 CHUEU MACHA SAMUEL 

4 CURRIE MADELIEF 

5 DAVIS STANLEY 

6 DE VILLIERS DANIEL JOHANNES 

7 DE WIT ANDRIES LOURENS 

8 FERGUSON MALCOLM GRANT 

9 HECKROODT DR ANNETIA SOPHIA 

10 LE ROUX, DR FRANS FRANCOIS 

11 MABOYE MOSIDI MIRRIAM 

12 MACHETHE MPEDI ALPHEUS 

13 MAGAELA MAMPURU ELIAS 

14 MAHOLWANA KUTALA EMELINE 

15 MBOKAZI SIMON ZWELIBANZI 

16 MENONG MORAOLE ISRAEL 

17 MONTJANE LESIBA DAVID 

18 MOTIANG MMUTLE JOHANNES 

19 MQAMKANA SAMSON MPHAKANYANA 

20 MUNASUR AMICHAND 

21 NAICKER NIRANJANI 

22 NEL FREDERICK 

23 NGOETJANA VINCENT MANARE 

24 ROJI OLYMPIA NOKWANDA 

25 ROMIJN GYSBERTUS HENDRIK ERNEST 

26 SAMBO ALBERT VIKIMPI 

27 SEABI MAUDU JOHANNES 

28 SERFONTEIN GIDEON JOHANNES 

29 SHABANGU, BRIG HARRY 

30 SIFUNDZA MHLABA STEVE 

31 STRAUSS HENDRIK HERMIAS 

32 THOMPSON ISA 

33 VAN EYK MULDER 

34 WATSON ESTHER BARBARA 

35 WIID ANTON JOHANNES

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Government Employees Pension Fund pensioners receive 5.5% annual pension increase.

Government Employees Pension Fund (GEPF) has announced an annual pension increase of 5.5% to its pensioners and beneficiaries with effect from 1 April 2018. 

The GEPF has granted this increase to enable pensioners and beneficiaries to keep up with rises in inflation. Inflation over one year until 30 November 2017 was 4.6% thus making the increase granted higher than inflation and higher than the 75% of Consumer Price Index (CPI) provided in terms of GEP Law and Rules. 

An analysis of the assets held by the Fund in relation to the valuation of its liabilities undertaken in 2016 showed that the Fund is 115.8% funded, which means that there are sufficient assets in the Fund to cover its actuarial liabilities in full. However, increases above those provided for in GEP Law and Rules is granted at the discretion of the Board taking the Fund’s investment performance into account. 

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How does the GEPF recover tax on behalf of SARS?

All GEPF clients (members, pensioners and beneficiaries) have the responsibility to submit their tax returns to SARS every year during the income tax return season. Pensioners and beneficiaries should obtain the IRP5 from GEPF in order to submit their income tax returns in line with requirements. Active members can obtain these from their employers. 

Please note if the source of income is only from GEPF (no other income sources and no other pension from GEPF (e.g. husband or wife pension in addition to the pensioner’s pension) and the pension is R350 000 or below, and the GEPF deducted the correct tax and no deductions or medical tax credit rebate that the pensioner wants to claim, the pensioner is not required to submit an income tax return. 

Take note: 

Receiving income from more than one income source 

If a pensioner or beneficiary is receiving income from more than one source and each pays money to SARS on your behalf for tax, you might be paying less tax than you need to because the combined income may put you into a higher tax bracket. This means you will have to pay in more at the end of the tax year when SARS gives you an assessment after you submit your income tax return. You can however request the GEPF in writing to deduct additional tax to make provision for an extra deduction paid to SARS. This could prevent pensioners from paying higher arrears to SARS upon tax assessment. Additional tax /voluntary tax deductions will be added to the PAYE on the IRP5 certificate at the end of the tax year. 

Garnishee orders (IT88/AA88) from SARS 

SARS legally appoints the employer (GEPF) in terms of Section 179 of the Tax Administration Act ,28 of 2011 to withhold and immediately pay over to SARS monies/tax owed in the form of AA88 and IT88 (garnishee orders) .. These deductions will not be updated or included on the tax certificate issued at the end of the tax year. The request to cancel the garnishee order will only be done upon receipt of a Withdrawal of Third Party Appointment letter from SARS.

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GEPF TRUSTEES ELECTIONS – FORCE MEMBER RESULTS 17/04/2018

STATISTICAL REPORT 

TOTAL ELIGIBLE VOTERS 68 447 

(SANDF) 65 116 

(SSA) 3331 Total Stamped Ballots (Votes Cast @ 10%) 7535 

Total Number of Valid Votes (Candidate Distribution) 6057 

Total Number of Invalid Votes (Captured on System) 1478 

NO. CANDIDATE CATEGORY SEX POSITION 

1 COETZER, COL. WILHEN JOHAN PIETER SANDF Male TRUSTEE 

2 MAQHUBELA CPL., WELCOME THOBILE SANDF Male SUBSTITUTE TRUSTEE

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GEPF TRUSTEES ELECTIONS PENSIONER MEMBER RESULTS – 17/04/2018

STATISTICAL REPORT 

TOTAL NUMBER OF ELIGIBLE VOTERS 418 296 

TOTAL VOTES CAST @ 6% 24 889 

(Total Ballots Received (Stamp Numbers)) 24 086 

(Total On-Line Votes (System)) 803 

TOTAL NUMBER OF VALID VOTES 16 822 

*TOTAL NUMBER OF INVALID VOTES 8067 

*Above includes Duplicates, Spoilt Ballots, Counterfoils without Ballots & Ballots without Counterfoil slips 

NO. CANDIDATES SEX POSITION 

1 LE ROUX, DR FRANS FRANCOIS Male TRUSTEE 

2 DE WIT, MAJ. GEN. ANDRIES LOURENS Male SUBSTITUTE TRUSTEE
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Minister of Finance appoints new GEPF Board

The Minister of Finance, Mr Nhlanhla Nene yesterday convened the first sitting of the new Government Employees Pension Fund (GEPF) Board of Trustees following the end of tenure of the previous Board. 

The new Board elected Dr Renosi Mokate as Chairperson and Mr Edward Kekana as Vice Chairperson. Both Trustees have been re-appointed to the GEPF Board. 

The Board of Trustees comprises of 16 members, eight nominated by employer and the other eight nominated by employees. The names of the new Board of Trustees is as follows: 

Employer Representative Trustees 

Department – Name 

National Treasury – Mr Stadi Mngomezulu (Re-appointed) 

Department of Defence – Maj Gen Mulungisa Sitshongaye 

State Security Agency – Ms Jennita Kandailal 

Department of Basic Education – Dr Morgen Pillay (Re-appointed) 

DPSA – Mr Thabo Mokwena 

SAPS – Lt Gen Lineo Ntshiea 

Specialist – Dr Renosi Mokate (Re-appointed) 

Specialist – Mr Themba Gamedze (Re-appointed) 

Employee Representative Trustees 

Department – Name 

NEHAWU – Ms Kgomotso Makhupola (Re–appointed) 

SADTU – Mr Edward Kekana (Re-appointed) 

NATU – Mr Alan Thompson 

PSA – Mr Pierre Snyman (Re-appointed) 

DENOSA – Mr Sibonelo Cele 

POPCRU – Adv Makhubalo Ndaba (Re-appointed) 

Uniformed Services – Col Johan Coetzer (Re-appointed) 

Pensioner – Dr Frans le Roux (Re-appointed) 

The GEPF Chairperson Dr Renosi Mokate welcomed trustees to the GEPF Board and wished them well in their term of office. She thanked the previous Board with whom she had worked with and congratulated them on their achievements over the last four years. GEPF Principal Executive Officer (PEO) Abel Sithole said, “The staff of the GEPF and I welcome the new Trustees to their positions and look forward to their contribution and guidance in the services of members, pensioners and beneficiaries”.

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IRP5 NOTICE

Dear GEPF Pensioner/Beneficiary 

The Government Pensions Administration Agency (GPAA) has been made aware that some pensioners/beneficiaries may have not yet received their IRP5 certificate. The delay is attributable to a backlog at the South African Post Office that was caused by the recent workers strike. The South African Post Office have assured us that they are dealing with the matter. We trust that you will receive your IRP5 in due course. 

If you wish to receive your IRP5 via email or send a query, please contact us on Tax@gpaa.gov.za.or 0800 117 669 

We also wish to take this opportunity to encourage our pensioners and beneficiaries to update their personal details (email, postal address and cellphone numbers) so that all correspondence can reach the correct recipients.

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GEPF INVESTMENT BELIEFS

The investment beliefs adopted by the Board of Trustees in March 2017 are stated below: 

2.1. The GEPF’s investment strategy considers the Fund’s risk profile, assets and liabilities. Risk is considered at the asset class, portfolio, and investment levels. 

2.2. Taking well-considered risks is necessary to earn the returns required to meet the Fund’s pension obligations, provided that appropriate risk management processes are followed. 

2.3. The Fund’s strategic asset allocation is the key determinant of portfolio risk and return, and it may be implemented through a combination of active and passive management. 

2.4. The GEPF integrates Environmental, Social and Governance factors into its investment policies as they are material to the long-term sustainability of the Fund. 

2.5. The Fund’s investments should play a developmental role in the South African and broader African economy, and investment decisions may reflect wider stakeholder views. 

2.6. The Fund’s reputation must be supported by robust and rational investment decisions, executed by appropriately skilled and competent investment professionals. 

2.7. Minimising the costs of investing is vital for long term investment success, and management fees should promote an alignment of interests between the Fund and its managers. 

2.8. The Fund’s trustees, administrators and investment managers are accountable for their decisions, and must perform their duties to the highest professional ethical standards. 

2.9. The Fund’s trustees commit to high standards of openness, transparency and appropriate disclosure in line with best practice standards.

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Statement by the Government Employees Pension Fund

The Government Employees Pension Fund (GEPF) is extremely perturbed by the latest announcement by the Public Investment Corporation (PIC) that it has suspended its Executive Head of Listed Investments, Mr Fidelis Madavo and the Assistant Portfolio Manager, Mr Victor Seanie, following a preliminary investigation report that reflects the flouting of governance and approval processes with respect to the Ayo Technology Solution transaction. 

Of serious concern to the GEPF is that the PIC had assured the GEPF on numerous occasions and in correspondence that correct governance processes were followed with respect to the Ayo Technology Solutions transaction. The GEPF views this as a serious breach of trust. 

The PIC invested in Ayo Technology Solution as part of the listed portfolio mandate. Thus at the time of its listing, the investment in Ayo fell outside of the unlisted investment portfolio within which there are set governance processes and there are limits set for the PIC to engage the GEPF. 

Although the total unlisted investments portfolio comprises less than 5% of the total assets of the Fund, it represents a significant amount of funds. These are funds that the GEPF invests into, contribute to the real economy of the country and to drive transformation but still aiming to realise it main objective of maximising returns. When the actions of officials bring this intention into question, it undermines the objective to invest in the real economy of the country and may lead to a review that may deprive the economy of greatly needed investment. 

Despite the apparent failures on this and other investments, the overall performance of the PIC as an asset manager remains positive and in line with agreed criteria. Nonetheless, the GEPF continues to heighten its monitoring and oversight. 

The GEPF requests of the PIC Board to urgently finalise its investigations of alleged impropriety with respect to the Ayo transaction and others and take appropriate action where it is warranted. END/

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