Ryk Van Niekerk: The Government Employees Pension Fund, or GEPF, released its annual report yesterday, November 16, 2020. It was for their financial year to the end of March this year.

Now the GEPF is a defined-benefit fund, which manages pensions and related benefits on behalf of government employees in South Africa. It was established in 1996, and is the largest pension fund in South Africa and one of the largest in the world.

The fund’s asset value stood at R1.89 trillion at the end of December, but dropped by nearly R250 billion or 13% to R1.64 trillion at the end of March and that was shortly after the market crash. The value has since recovered significantly and is back to R1.87 trillion. Mr Musa Mabesa is the acting principal executive officer of the GEPF and he is on the line. Musa, thank you so much for joining me. We saw very poor economic performance last year and early this year, even before the impact of the lockdown put our economy into cardiac arrest in the second quarter.

But in the annual report you regard the current performance of the fund as being really healthy. How do you think members should look at the fund’s performance in the period under review?

MUSA MABESA: Thank you, Ryk. I think under the circumstances the GEPF has been doing well, and it’s important to stress that we are not the only fund or only entity that took a knock from the global economic turmoil, the impact of Covid and the downgrading of our sovereign rating in March by Moody’s. So we are not the only ones that were impacted by what is going on in the market. So, under those circumstances I think the GEPF is doing well. We are able to meet our liabilities and we can at all times meet out short-term liabilities owing to our funding level being above 100%. So I think the fund, under the circumstances, is doing well.

RYK VAN NIEKERK: The fund received around R80 billion in contributions from its members during this period, but a total of R111 billion was paid to pensioners. In fact I’m looking at the graphs now. It seems that since 2013 the payments to pensioners exceeded the members’ contributions or the inflow of money. Is that a reason for concern?

Read more @Money Web