GEPF mourns the passsing of Substitute Trustee, Mr. Terence Chauke

Date: 15 September 2021

The Government Employees Pension Fund (GEPF) is shocked and saddened by the passing of board member and employer-nominated subtitute trustee, Mr. Terence Chauke on 12 September 2021.

Mr. Chauke served as an employer – nominated substitute trustee on the GEPF Board. He was also a member of various committees including the Finance & Audit Committee, Investment Committee, Valuations Sub-committee as well as the Social & Ethics Sub-committee.

GEPF Chairperson of the Board, Dr Renosi Mokate, on behalf of the Board and staff members passes her deepest condolences to the Chauke family, their colleagues and friends.

The GEPF acknowledges the dedication, diligence and professionalism with which Mr. Chauke served the Fund. The Fund will forever be grateful for his tireless contribution and dedication to its members, pensioners and beneficiaries.

May his soul Rest in Peace.

Issued by: Government Employees Pension Fund

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GEPF pensioners will receive a 3.2% annual pension increase as of 1 April 2021

Date: 15 March 2021

Pretoria – Government Employees Pension Fund (GEPF) announced today that an annual pension increase of 3.2% is to be provided to its pensioners with effect from 1 April 2021.

This pension increase is based on the 3.2% inflation rate for the 12 months ending 30 November 2020, in line with policy and past practice, thus making the increase equal to 100% of Consumer Price Index (CPI) and higher than the 75% of CPI provided in terms of GEP Law and Rules.

Pensioners who retired on or before 1 April 2020 will receive the full 3,2% increase as of 1 April 2021, while pensioners who retired after 1 April 2020 will have their pensions increased proportionally for each month of retirement between the date of retirement and 31 March 2021, with effect from 1 April 2021.

It must be noted that increases such as this increase which is above what is provided for in GEP Law and Rules are granted at the discretion of the Board of Trustees of the GEPF taking the Fund’s investment performance into account.


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.

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Monday, 16 November 2020, Pretoria

Main Points

  • GEPF asset market value declined by 11.4% from R1.8 trillion in 2019 to R1.64 trillion in 2020. This decrease in the investment value is mainly attributable to the losses incurred in March 2020 as a result of the impact of Covid-19, the downgrade in credit ratings and a persisting low growth environment.

  • Income received during the financial year included:

    Dividend income – R34.1 billion

     Interest income – R52.3 billion

     Property income – R1.8 billion

     Contributions received – R 80,2 billion

  • Benefits paid upon member’s resignation, retirement, or death was R111 billion which was an increase of R 8.4 billion against 2018/19 financial year payments. This was mainly due to an increase in pension payments which accounted for 62% of the total benefits paid which was driven by the 5.2% monthly increase granted to pensions and a 3.1% increase in the number of pensioners.

As at 31 March 2020, the end of the financial year 2019/2020, the Government Employees Pension Fund, Africa’s largest pension fund reported a decline in its investment portfolio of R243 billion largely impacted by the turmoil in the South African and global economy in the last quarter of the 2019/2020 financial year.

However, due to the resilience of the GEPF investment strategy, the Fund has recovered the losses incurred and its unaudited value is currently R1.9 trillion. This recouping of losses clearly indicates that the GEPF remains financially sound despite the tough economic conditions that the Fund operated in, in the 2019/2020 financial year.

The financial results however continue to highlight that the performance of the Fund is not isolated from the country’s economic and development constraints. The poor state of the South African economy had a significant impact on the Fund, as the economic climate in the three months leading to 31 March was extremely turbulent and coincided with the end of the Funds 2019/2020 financial year.

Much of the decline in the Funds market value was due to the performance of local equities, capital markets and listed property. The decline in international asset classes was offset by a significant decline in the value of the rand against the dollar. The value of the assets reflects depressed market values as at 31 March 2020.

In the context of a uniquely challenging economic environment, the GEPF did sustain an acceptable overall investment performance with income of R168, 4 billion as a result of investment income of R88, 2 billion and contributions of R80, 2 billion. The fund outperformed its benchmark by 0.22%.

The adverse economic climate in South Africa led to the sharp rise in the bond yields in March 2020 resulting in the value of the Fund’s liabilities reducing considerably as at 31 March 2020. This reduction in liabilities would have resulted in the funding level of the GEPF increasing but the unintended consequence would have been a marked decrease in member exit benefit values (calculated using the Actuarial Interest Factors derived from the actuarial valuation) for the upcoming years, until the results of the next statutory valuation is approved.

Given the abnormal economic shocks and the impact on member benefits, the Board of Trustees resolved to carry out an interim valuation as at 31 March 2020 that will be followed by a statutory valuation as at 31 March 2021. The postponement of the statutory valuation to March 2021 is still within the timeframe prescribed for actuarial valuations by the Government Employees Pension Law.

Benefit payments to members will continue to be made in accordance with the approved Actuarial Interest Factors, which came into effect on 1 July 2019, until the statutory valuation as at 31 March 2021 is completed. These safeguards members from the adverse effect that would have resulted from adopting the Actuarial Interest Factors based on abnormal circumstances as at 31 March 2020.

In line with the Fund’s commitment to ensure all benefits due are paid, the total benefits paid during the year under review increased by R8.4 billion, mainly due to the increase in pension payments, which accounted for 49% of the total increase. The increase in the pension payments were driven by the 5.2% monthly increase granted to pensioners from 1 April 2019 and a 3.1% increase in the number of pensioners.

Whilst the number of pensioners increased, the Fund also experienced a slight increase in active members by 0.3% to 1 269 161 members (2019: 1 265 421).

The GEPF expects the difficult economic climate in South Africa to persist as the economy continues to contract. Following the conclusion of its consultation with the Minister of Finance on its asset-liability modelling the GEPF over a period, will begin to align its strategic asset allocation to match its liability profile. The strategic asset allocation determines how the GEPF allocates funds to asset classes locally and offshore.

The GEPF is keenly aware of the important role it plays in the South African economy, and that its members, pensioners and beneficiaries are impacted by economic, social and environmental challenges, in recognition of which the GEPF continues to direct funds towards the development of the country, inclusive of infrastructure, transformation, sustainability, priority sectors and small –medium enterprises. Such investments however must ensure beneficial returns to the GEPF.

The GEPF expresses its appreciation to its implementing agencies, the Public Investment Corporation (PIC) and Government Pension Administration Agency (GPAA) for the work they do to ensure that the GEPF fulfils its mandate.


The Audited Financial statement can viewed on the GEPF website on

Issued by Government Employees Pension Fund

For more information, please contact:

Matau Molapo, Communications division

T: +27 (0) 12 424 7315

M: +27 (0)79 1910 757


About the Government Employees Pension Fund

The Government Employees’ Pension Fund is one of the largest pension funds in the world, with over 1.2 million active members and over 450 000 pensioners and beneficiaries. Our core business, governed by the Government Employees’ Pension Law (1996), is to manage and administer pensions and other benefits for government employees in South Africa.

We work to give members and pensioners peace of mind about their financial security after retirement, moreover during situations of need by ensuring that all funds in our safekeeping is responsibly invested and accounted for and that benefits are paid efficiently, accurately and on time.

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GEPF change rules regarding pension debt on divorce

Following the gazetting of the Government Employees Pension Law Amendment Bill on 23rd May 2019, the Government Employees Pension Fund (GEPF) will, once the amended rules are implemented, no longer subject a member to a debt model in executing a divorce settlement. Instead the new amendment provides for the reduction of pensionable service of the GEPF member that is equal to the value of the divorce settlement amount paid. 

This amendment to the law removes the pension debt that accrued to the GEPF member when a portion of their pension was paid out by the GEPF as a divorce settlement. This pension debt calculation created the perception that members could find themselves owing money to the GEPF when they retired. 

The amendment now ensures that rather than creating a debt, there will be an adjustment to the member’s pensionable service following the payment of a divorce settlement by the GEPF. This means that the benefit that will be paid to the member upon retirement will now be decreased by reducing the members’ years of pensionable service to take into account the pension interest of the member that was given to the spouse upon divorce. 

Therefore, members will receive their full benefit after the reduced pensionable service has been affected. Members who have more than ten years of pensionable service will still be entitled to a lump sum and a monthly pension upon existing the fund, however at a reduced value. Following this law change, the GEPF is currently developing and gazetting rules that will govern the implementation. It is expected that this process will be finalised in July 2019 and the implementation of the new rules will come into effect as of the 01st August 2019. 

Parallel to the process above, the GEPF will be writing to all affected GEPF members in July 2019 to inform them about how these changes are going to affect their pensions and service period and allow them the opportunity to opt from the old divorce debt model into the service reduction model. The affected members will have up until the 22nd May 2020 to indicate their choice of either remaining with the debt and interest model or move to the service adjustment model approach. Currently affected members who fail to indicate their choice by 22 May 2020 will automatically be converted into the new approach. Post 22 May 2020 all members who have a legal divorce claim against their pension will be subjected to the service reduction model. 

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Government Employees Pension Fund pensioners will receive a 5.2% annual pension increase.

Government Employees Pension Fund (GEPF) announced today that an annual pension increase of 5.2% to its pensioners with effect from 1 April 2019. 

The GEPF has granted this increase to enable pensioners to keep up with rises in inflation. 

The pension increase is based on the 5.2% inflation rate for the 12 months ending 30 November 2018 released by Statistics South Africa on 12 December 2018 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 whose pensions commenced after 1 April 2018 will receive a proportionate increase based on the number of months they have been in receipt of a pension by 31 March 2019. 

It must be noted that increases such as this increase which is above what is provided for in GEP Law and Rules is granted at the discretion of the Board taking the Fund’s investment performance into account. 

An analysis of the assets held by the Fund in relation to the valuation of its liabilities undertaken in March 2018 showed that the Fund is 108.3% funded, which means that there are sufficient assets in the fund to cover its actuarial liabilities in full. 

This funding level as been achieved despite, amongst others, the: 

• increase in the number of pensioners 

• pension increases 

• increase in resignation pay-outs 

• increase in funeral benefits from R7 500 to R15 000 upon death of a member, pensioner or spouse as well as the funeral benefit increasing from R 3 000 to R 6 000 for eligible children 

• the introduction of the Child Pension which replaced the Orphan’s Pension. 

Benefit improvements over the years together with investment performance, salary and pension increases result in changes in both the minimum and long term funding level. 

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Board Letter to GEPF Members and Pensioners About the PIC Inquiry

Dear Members / Pensioners 

As many of you are aware, the Public Investment Corporation Inquiry established by President Mr Cyril Ramaphosa, to probe allegations of impropriety at the Public Investment Corporation (PIC) has begun. 

The Government Employees Pension Fund (GEPF) supports the establishment of the inquiry as we believe it will result in a stronger and more effective Public Investment Corporation. In this regard, the GEPF has written to the PIC Inquiry indicating its willingness to cooperate fully with the inquiry. 

We have also noted with concern the recent suspensions of senior PIC employees as well as the instituting of a forensic investigation by the Board of the PIC into allegations of impropriety against certain directors of the Board. The GEPF views such matters in a very serious light and as such, we have written to the PIC raising our concerns with respect to these matters, including the alleged governance failures at the PIC. 

It is understandable that the revelations at the inquiry and the alleged governance failures are as much a concern to you, our members and pensioners, as it is to us at the GEPF. 

I would like to assure you that the GEPF is in a very sound financial situation and that such issues will not have an impact on your pensions and benefits. Despite the indications of apparent failures and or circumvention of processes with regard to a number of 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 board and management of the GEPF takes its fiduciary duties very seriously and is committed to ensuring that our fund continues to grow. 

Yours sincerely, Abel Sithole Principal Executive Officer GEPF

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The GEPF is a Defined Benefit fund. The Rules of the Fund stipulate that the benefit payable to a member on retirement is based on his or her pensionable salary and years of membership in the Fund. The benefit payable is not related to the contributions received on behalf of that member. Where a member retires with less than 10 years of service or withdraws from the Fund prior to retirement, the member receives his or her Actuarial Interest in the Fund, which is the estimated value of the benefit that the member has built up in the Fund to the date of exit. Put another way, it is the amount of money the Fund is holding in order to fund the expected future benefit payment to the member. 

The total of the Actuarial Interest values for all members and pensioners is compared to the total assets held by the Fund to determine whether the Fund has sufficient assets to meet its liabilities – this is done formally every two years as part of the Actuarial Valuation of the Fund by a valuator who an independent expert in this field and is approved by the regulator. An extract of the valuation results is also reflected in the Fund’s published Annual Report. 

Actuarial Interest values are calculated by applying a formula based on the following: 

1. The average pensionable (or basic) salary in the last two years prior to exit; 

2. The years of membership with the Fund; 

3. Any purchase of service or money transferred into the Fund from other funds; and 

4. A factor – called an Actuarial Interest Factor – based on the member’s age and whether the member is a “Services” member or an “Other” member. 

In calculating the actuarial interest, the Fund determines, for each member, the potential benefit that would be payable in each future year for each type of exit (that is, resignation, death, retirement, etc.). Since the Fund has no way of knowing when and how each member will exit and what the member’s salary will be at the date of exit, this calculation requires that various assumptions be made about the future economic conditions and the demographics (profile) of the entire membership. 

The demographic and economic assumptions are reviewed as part of each Actuarial Valuation of the Fund to ensure they remain appropriate and in line with the actual experience to give the best possible estimate of each member’s Actuarial Interest value in the Fund. 

• The demographic assumptions relate to the expected number of withdrawals, deaths and retirements of members at each age and how long pensioners are expected to live. These assumptions are specific to the Fund as they are calculated from the actual experience of the Fund- this is the best available indicator of what is likely to take place in the future. 

• The economic assumptions relate to the expected level of future inflation, interest rates and investment returns (which are calculated from investment market information), salary increases (which are calculated relative to inflation) and pension increases (which are based on the pension increase policy of the Fund). 

As the demographic experience of the Fund and economic circumstance change, it has to be reflected in the demographic and economic assumptions. The Actuarial Interest Factors, and therefore Actuarial Interest values, can increase or decrease as a result of any change in the demographic and economic assumptions. This will, in turn, reflect in a change in the current value of each member’s benefits in the Fund. These changes are not the result of a decision by the Board of Trustees, the employer (government) or employee representative (trade unions).

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GEPF pensioners and members untouched by new tax regulations

The Government Employees Pension Fund (GEPF) assured its members and pensioners that the new Taxation Laws Amendment Actwill not affect their pensions or benefits. As a defined benefit pension fund, the benefits of the GEPF are already taken as one third lump sum gratuity and the two thirds is taken as a pension. It will however affect the recording and attribution of the employer’s contribution in respect of active members. It will also increase the amount that can be contributed to the Fund tax free for the majority of its members.

The new tax laws were put in place to safeguard the retirement savings of all South Africans who contribute to retirement funds. These changes will mostly affect members of provident funds who will now have to split their retirement benefit between a one third lump sum and two thirds pension on the portion of their benefits accumulated after 1 March 2016 while retaining the right to take all amounts accumulated until this date as a lump sum.

Principal Executive Officer Abel Sithole stressed that the Fund continues to work for the financial security of its members and pensioners. “Members of the GEPF will be able to access their pensions after 1 March 2016 in exactly the same way as they can be accessed currently. None of the calculations and benefits will change due to these changes” says Sithole.

Sithole urged members not to panic and consider leaving the Fund in order to access their full pension benefits. He said the new Act would not take away the right of pension fund members to withdraw their benefits before or at retirement as a lump sum.

He strongly reiterated the benefit for government employees of working until their retirement date in order to continue contributing to their pension as long as possible, which will lead to a bigger pension. Mr Sithole reminds members of the tax implications of an early cash withdrawal benefit.Any member, who is unsure about their pension benefits should seek clarity from their human resource departments or contact the GEPF on 0800 117 669.

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