July 2022
06Jul

Warning over pension change for South Africa

Retirement funds will have to invest in upskilling trustees to empower them to navigate the complex world of infrastructure investing opened up by the gazetting of the amendments to Regulation 28 of the Pensions Fund Act, says Andrew Davison, chair of the Investments Committee of the Actuarial Society of South Africa (ASSA). The new Regulation 28 investment limits allow retirement funds to invest up to 45% of assets in South African infrastructure projects, effective from the beginning of January 2023. Infrastructure...

July 6, 2022
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June 2022
29Jun

South Africa. Treasury sheds light on retirement reform proposals

At a recent conference, National Treasury’s Acting Director-General expounded on the two-pot retirement system, the governance of umbrella funds and changes to Regulation 28. Ismail Momoniat, Acting Director-General at National Treasury, addressed the Pension Lawyers Association Virtual Conference in May with an update on retirement reform developments. He confirmed that retirement reform is alive and well, although there is still a need to consolidate the various proposals. He focused on five main areas: 1. Two-pot system proposal On the two-pot system proposal, which...

June 29, 2022
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May 2022
10May

More tax for thousands of retirees in South Africa

Thousands of retirees will find lower-than-expected pensions in their bank accounts at the end of this month owing to higher tax deductions. Thousands more already had this experience at the end of last month. This is as a result of administrators implementing tax directives issued by the South African Revenue Service (SARS) in an attempt to ensure the correct tax is collected upfront from retirees who receive more than one pension or a pension and salary income, said consumer financial...

May 10, 2022
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04May

South Africa. GEPF signs new unlisted Africa investment mandate with PIC

The Government Employees Pension Fund (GEPF) and the Public Investment Corporation (PIC) have signed a new mandate related to unlisted developmental investments in Africa. The PIC confirmed the new mandate in a short statement on Tuesday, but did not reveal the value of the deal. However, Bloomberg reported that the agreement is worth around $1.6 billion (just over R25 billion If this figure is correct, then it is much lower than the GEPF’s previous unlisted developmental investment mandate with the PIC,...

May 4, 2022
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April 2022
29Apr

South Africa. How financially sound is the Government Employees’ Pension Fund?

The country’s biggest and most important pension fund is healthy, but there are some reasons to be concerned. The extraordinary rise in the value of the JSE between March 2020 and March 2021 stemmed three years of declining values within the Government Employees’ Pension Fund (GEPF) and has placed it in a sound financial position as far as short-term commitments are concerned. However, it is unlikely that investors will see another year where the JSE rises by 55%, which makes the...

April 29, 2022
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March 2022
10Mar

South Africa. GEPF will grant a 5.5% increase to its pensioners

The Government Employee Pension Fund (GEPF) has announced that its pensioners will receive an annual pension increase of 5.5% from April 1, 2022. Read also Saving for Retirement by Kenya’s Informal Sector According to the fund, it instituted the increase to enable its beneficiaries to keep up with rising inflationary rates. Read also India. Labour Ministry launches ‘Donate-a-Pension’ initiative: Check details “This pension increase is based on the 5.5% inflation rate for the 12 months ending 30 November 2021, thus making the increase...

March 10, 2022
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Retired women in South Africa carry a huge burden of poverty
04Mar

Retired women in South Africa carry a huge burden of poverty

South Africa’s president, Cyril Ramaphosa, recently acknowledged that “South Africa needs a new consensus to deal with poverty, unemployment and inequality”. Despite the government’s efforts to address poverty through the provision of state grants, it’s still on the rise. In 2020, it was reported that half of the population was experiencing hardships that have pulled individuals and households into poverty. Even before the COVID-19 pandemic, the South African economy had been growing very slowly, with high rates of unemployment and increasing...

March 4, 2022
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February 2022
24Feb

GEPF Annual Report 2020/2021

By GEPF Economic environment The financial year ending 31 March 2021, was a ‘tale of two worlds’, with strong recovery from developed financial markets being contrasted by weak economic growth in most emerging markets. This effect was also mirrored by the divergence in vaccination rates between developed and emerging markets. Locally, the picture has been familiar. There was very strong growth in financial markets, however, this needs to be contrasted by the stark economic climate in South Africa. The impact...

February 24, 2022
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24Feb

South Africa. Pension funds may now invest up to 45% of their capital offshore

During his budget address to parliament, Finance Minister Enoch Godongwana said amendments to Regulation 28 would be published in March. Regulation 28 sets out the criteria and maximum limits of where and in which asset classes retirement funds may invest. The Budget Review document announced that local pension and savings funds may invest up to 45% of their capital offshore. This is inclusive of the 10% allowance for investments into other African countries. The proposed amendments have been through two rounds...

February 24, 2022
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17Feb

New pension changes coming for South Africa before the end of February

The National Treasury will introduce new pension fund regulations for South Africa before the end of February, says deputy finance minister David Masondo. The changes are aimed at ‘unlocking’ new investment in infrastructure by the private sector and form part of the process to amend Regulation 28 of the Pensions Fund Act to enable retirement funds to invest in infrastructure, Masondo said in his State of the Nation debate in parliament this week. “These amendments introduce more effective maximum limits for...

February 17, 2022
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