The GEPF recently published the statutory actuarial valuation report as at 31 March 2021. Actuarial valuation reports are quite detailed, long and difficult to understand for the layman. This article aims to summarise the content of the actuarial report and explain the results in a simplified manner.

The purpose of statutory actuarial valuation

As suggested by the name, a statutory valuation is required by regulation. The GEPF is Governed by the GEP Law and Rules. According to the GEP Law, the fund is required to submit a statutory actuarial valuation at least once every three years. Hence one of the purposes is to satisfy this regulatory requirement. Though the report is meant to cover the aspects required by the GEP Law, there are additional disclosures included which are not requirements of the GEP Law. These are more aligned with the Pension Funds Act  and are included in the valuation report as best practice.

A valuation presents a good chance for the fund to assess its financial health. This is done by assessing whether the existing assets are sufficient to meet all the fund’s obligations. The valuation also serves the purpose of assessing the level of employer contributions required in the future years as well as reviewing the level of additional reserves required to further protect members’ benefits.

A glance at the valuation results

The fund reflected a healthy financial position as at 31 March 2021. A healthy financial position is one where the assets and investments of the fund are worth more than the fund’s obligations. As at 31 March 2021, the fund’s net assets were about R2.041 trillion compared to total liabilities of R1.854 trillion reflecting a surplus of around R187 million. This reflects a minimum funding level of 110.1% which is an improvement from the previous funding level of 108.3%. The funding level of 110.1% means that the fund has R110.10 set aside as assets for every R100 that it owes to its members.

The valuation report reflected a required employer contribution rate of 17.3% of pensionable salaries for Services members and 13.5% of pensionable salaries for other members. The contribution rate reflects what is needed to meet the benefits that members are expected to earn over the next two years, provided that all assumptions work out as expected.

Membership statistics

The valuation of the fund was based on an increased membership of 1 270 444 active members and 485 633 pensioners and beneficiaries.  The pensionable salaries of members who contributed to the fund throughout the valuation period increased by an average of 6.2% per annum, during the valuation period. Annual pensions increased by an average of 4.0% per annum during the valuation period. The employer contributed at 16% and 13% of pensionable salaries for services and other members respectively.

The valuation assumptions and why they are required

The GEPF is a defined benefit fund which means that the formula to determine the benefits payable to members when they leave the fund are prescribed. The fund does not guarantee the exact payment to be made at the point of exit. In addition, it is not possible to predict with certainty when exactly a benefit payment will be triggered and for how long the pension payments will be made for. Assumptions are then required to approximate these factors.

Assumptions on how salaries and pensions will increase in the future are then required. These are referred to as salary and pension increase assumptions and form part of the economic assumptions. Assumptions relating to how likely members are to withdraw from the fund and how long they are expected to live for, are also required. These are referred to as the demographic assumptions.

It is important to note that the fund’s obligation relates to the promise made to members to pay their pension benefits for life. This is a financial commitment and is based on benefits payable in the future. There is a need to standardise these future payments in today’s terms. To do this, we need to attribute a time value to money and express these future payments as a lump-sum value in today’s terms. This is done by discounting all future cash flows using the discount rate assumption, which is part of the economic assumptions.

As you can see, the assumptions are required to estimate a value today of all the expected future benefit payments.

Why the assumptions change and why they are best-estimate

The economic assumptions are based on the long-term market expectations and conditions as at the valuation date. As the assumptions are based on market expectation, these values change as market views and sentiments change. The assumptions provided by the market are referred to s best-estimate assumptions. Such assumptions allow for a long-term view of the market and take account of expected peaks and troughs and expects these effects to cancel each other out over time. These best-estimate assumptions are then used to determine the fund’s liabilities. It is important to note that the best-estimate liabilities are expected to cover for all expected payments.

What has led to the improved minimum funding level?

The 2021 economic assumptions are higher than in 2018 and result in a wider gap between the discount rate and the salary /pension increase assumptions. This gap is the biggest driver of the liabilities. The higher the gap is, the lower the overall fund liability. The minimum funding level has improved mainly due

  • to salary and pension increases being lower than allowed for in the previous projections
  • to the wider gap between the discount rate and salary and pension increase assumptions for the current valuation,
  • pension increases being higher than previously projected.

Though the investment returns were lower than expected and the demographic assumptions were less favourable compared to expectations, this was not enough to outweigh the surplus generated by the above factors. The fund, therefore, experienced an increased surplus and reflected a higher minimum funding level.

The required employer contribution rates

Part of the disclosures of the valuation are the recommendations on the future contribution rates to be adopted by the employers going forward. The recommendation is based on the benefits that are expected to be earned by active members over the next two years, which in turn is based on the valuation assumptions adopted. The required employer contribution rate is equal to 17.3% of pensionable salaries for Services members and 13.5% of pensionable salaries for Other members. This is lower than the previously required rates of 18.9% and 14.4% of pensionable salaries for Services and Other members respectively. The reduction in the required contribution rate is mainly due to the less stringent valuation economic assumptions adopted for the current valuation.

What the long-term funding level represents

It is important to note that both the minimum and long-term funding levels look at the long-term position of the fund. The only difference is that the minimum funding level does not make an allowance for contingency reserves. Instead, the minimum funding level only considers the best-estimate liabilities, which are the funds set aside to cover for the expected future benefit payments. Contingency reserves are additional amounts that are set aside to cover unexpected events over a prolonged period. These events include

  • prolonged periods of low economic activity and low returns; and
  • prolonged mortality improvements resulting in pension payments being made for longer periods than expected.

The GEPF liabilities are of long duration and payments are expected to be made over a long period of time. It is highly unlikely that the fund would. Unlike the banking and insurance industries, pension funds are expected to withstand periods of depressed economic activity over the medium term. Furthermore, the GEPF has the government as a guarantor of last resort which adds further protection to members’ benefits. This means that there is no strict requirement to hold contingency reserves in full. Holding the full contingency reserves is an ideal position but is not a requirement for the fund.

As previously mentioned, the fund is governed by the GEP Law, and the GEP Law does not make any allowance for contingency reserves. The fund reports on contingency levels to try mirror the Pension Funds Act (“PFA”), which is applicable to all other funds. However, even under the PFA, a fund is only considered to be in a deficit if its assets cannot meet the best-estimate liabilities only. This means that contingency reserves are not allowed to put a fund into a deficit and a fund would only be required to hold the level of contingency reserves supported by its assets. The contingency reserves should not be viewed as an additional obligation but should be viewed as an additional buffer that is set aside to cover unexpected events.

The full recommended contingency reserves amounted to R892m. The fund’s assets can support holding 20.9% of the full contingency reserves. This represents an additional buffer in addition to the amounts set aside to meet the best-estimate liabilities.


In summary, the fund is in a healthy financial position and has reflected an improved minimum funding level from the previous valuation. This fund can afford to meet all expected benefit payments in full and allow for a buffer of R187m to cover unexpected events.  The recommended employer contributions rates have been reduced from the previous valuation due to the more favourable long-term assumptions.

In closing, the fund is in a healthy position and aims to provide further protection for its members” benefits.

Brian Karidza is the Head of Actuarial & Benefits Administration Services at the GEPF

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GEPF and PIC sign a new unlisted investment mandate

03 May 2022 

PRETORIA – The Government Employees Pension Fund (GEPF) and the Public Investment Corporation (PIC) have signed a new unlisted developmental investment mandate. The GEPF is the largest pension fund in Africa, with assets in excess of R2.1 trillion, which are managed by the PIC.

The GEPF first introduced the unlisted developmental investment mandate in 1997 under the name Isibaya Fund and subsequently renewed it over the years. The developmental investment funds are aimed at generating financial and socio-economic benefits by addressing structural imbalances in the economy to facilitate transformation, economic growth, job creation, and environmental and financial returns.

The developmental mandates focus is on South Africa and the rest of Africa. The target of developmental investments for South African is between R300 million and R500 million per entity although attractive investments starting at R100 million will be considered per entity. The Rest of Africa developmental investment portfolio shall mainly comprise of investments between USD20 million and USD40 million.

The PIC encourages interested institutions to submit proposals to this portal: Proposals will be assessed in accordance with the prescripts of the funding guidelines of each mandate.


Issued by
PIC Corporate Affairs


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  • The GEPF Durban Office in 407 Anton Lembede Street is currently closed due to the flooding caused by the recent heavy rainfall.
  • A further announcement will be made when the office is ready to reopen.
  • Kindly note that all the other GEPF/GPAA walk-in centres and the call centre (0800 117 669) remain open to the public.
  • Clients can also use the following communication channels:
  • Clients who wish to claim Funeral Benefits can forward their claims via email to or FAX 012 319 3655
  • All other correspondence can  be directed to the email:

Stay healthy and safe as we do our bit to reduce the spread of the Coronavirus (COVID-19)

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Cape Town: Tuesday, 29 March 2022

The Western Cape regional office of the Government Employees Pension Fund (GEPF) is relocating to new premises. The office, previously located at Thibault Square, Standard Bank Building in Long Street, Cape Town, will start operating from the Buitengracht Centre at 125 Buitengracht Street from Thursday 31 March 2022.

The new premises have a much bigger working area and office space; thus, the walk-in service center will be able to accommodate more people inside as opposed to clients queueing in the streets where they are often forced to contend with the harsh elements and may potentially be exposed to threats to their safety.

According to Mario Johns, GEPF Branch Manager in the Western Cape, the GEPF is committed to ensuring that its members, pensioners, and beneficiaries receive quality services and that those services are offered in the most comfortable, safe, and client-friendly environment. The operating hours are from 07:00 to 16:00.

In trying to get services closer to the people, the GEPF has nine (9) walk-in centers and seven (7) satellite offices across the country.

The GEPF is Africa’s largest pension fund with more than 1.2 million active members and over 473 000 pensioners and beneficiaries. It is a defined benefit fund that manages pensions and related benefits on behalf of government employees that currently boast assets worth more than R2.09 trillion.


For more information please contact:
Rakgwatha Mokou (Manager: Media and Stakeholder Relations)
Telephone: +27 (0) 12 319 1126
Mobile: +27 (0) 81 814 0030

Mack Lewele (Senior Manager: Communications)
Telephone: +27 (0) 12 399 2543
Mobile: +27 (0) 82 450 5076

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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

T: +27 (0) 12 424 7315

M: +27 (0)79 1910 757


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GEPF investment portfolio registers a 27.5% growth and a market value of R2.09 trillion

09 November 2021, Pretoria

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.


The Audited Financial statement can be reviewed on the GEPF website on

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



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GEPF welcomes the appointment of the new PIC Board

05 November 2021

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.


For more information please contact:

Matau Molapo, Communications

T: +27 (0) 12 424 7315

M: +27 (0)79 1910 757


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