The Government Employees Pension Fund (GEPF), Africa’s largest pension fund with more than 1.267 million active members, on Tuesday reported solid financial results for the 2023/24 financial year, maintaining a robust performance despite volatile economic conditions.
The 2023/24 financial year was turbulent and uncertain for investors in South Africa and globally amid continuing Russia-Ukraine war and the conflict in the Middle East, with Israel’s continued military action in Palestine.
Despite this, the GEPF's portfolio grew by 2.6%, reaching a record market value of R2.38 trillion, up R61 billion from the previous year. This growth was underpinned by an annual investment return of 4.9%, improving on last year's 3.5% return.
The GEPF’s net investment income totalled R116.22bn, with contributions from interest income at R59.72bn, property income at R2.07bn, and dividend income amounting to R52.04bn. This performance was bolstered by a funding level of 110.1% and a 10-year annualised return of 7.2%.
Dondo Mogajane, the chairperson of the GEPF Board of Trustees who recently resigned, said, "I can confidently state that the GEPF remains financially strong and resilient. Even in a challenging economic climate, the Fund continues to meet stakeholder needs. We recognise that in uncertain times, a reliable income is crucial, especially for our pensioners and beneficiaries. We hope that the 6% pension increase and the 33% increase in funeral benefits we implemented in April 2024 will help alleviate some of the financial burdens faced by many.“
The Fund has shown resilience in the face of slow economic growth, high unemployment and the global challenges of conflicts, rising energy costs and inflation, he said.
Member contributions saw a 10.8% increase to R91.94bn, highlighting strong member engagement and active membership, which grew by 0.84% from 1267307 to 1277902. Pensioner numbers also rose by 4.3% to 351100, indicating sustained demand for retirement and other benefits from the fund.
In terms of benefits disbursement, the GEPF said it had processed 35523 retirement claims, awarding R22.6bn in gratuity payments and R77.6bn in annuities. Resignation benefits amounted to R27.6bn, down from R32.9bn last year. Additionally, the fund paid out R7.5bn in death benefits, R350.9 million in funeral benefits, R13.2bn in spouse pensions to 174,188 beneficiaries, and R1.4bn in child pensions for 23 477 eligible children.
The fund’s net cash flow as of March 31, 2024 stood at R59.71bn, driven largely by net investment income of R109.02bn, contributions of R91.94bn and benefit payments of R141.35bn.
Looking ahead, the GEPF outlined continued efforts to enhance oversight and operational efficiency. These include implementing recommendations from the Mpati Commission, advancing its investment strategy through the Public Investment Corporation, and supporting the Government Pensions Administration Agency (GPAA) to strengthen data security after recent breaches when its systems were hacked in February and March 2024
“These security breaches are of great concern and we have liaised with National Treasury, which oversees the GPAA, to ensure more robust systems and processes....
“While the experience has highlighted a GPAA capacity gap, the exercise underway will deliver ongoing enhancements,” the GEPF said.
BUSINESS REPORT