GEPF posts strong results, assets grow to R2.7trln amid global volatility, domestic strains

The Government Employees Pension Fund (GEPF) delivered a resilient performance in the year ended 31 March, growing its assets to R2.69 trillion and achieving a 14.1% investment return, despite a year marked by economic uncertainty both at home and abroad.

The Fund maintained a strong 119% funding level, underscoring its long-term financial sustainability.

Global markets were strained by ongoing geopolitical tensions, elevated energy costs and persistent inflation.

Domestically, South Africa continued to grapple with sluggish GDP growth, structural bottlenecks and sectoral underperformance.

However, improvements such as reduced load shedding and the formation of the Government of National Unity supported a modestly more stable economic environment.

The GEPF said the introduction of the Two-Pot retirement system, which allows limited early access to pension savings, also had a noticeable impact on household liquidity and pension fund inflows.

Despite the broader environment of volatility, the GEPF said it remained firmly guided by its long-term investment strategy, which is rooted in the Fund’s investment policy and core beliefs.

This approach informed decisions across asset classes and underpinned its ability to navigate the year’s challenges.

The Fund also strengthened its leadership position in responsible investing through a comprehensive suite of environmental, social and governance (ESG) policies.

In listed equity, the Public Investment Corporation (PIC), acting on behalf of the GEPF, voted on 2 800 resolutions at 157 meetings. In unlisted assets, the PIC voted on 398 resolutions at 58 meetings.

The GEPF and PIC conducted 157 engagements covering 293 ESG matters, of which governance (34.5%), transformation and social issues (45.1%), and environmental concerns (20.5%) were key focus areas.

As of 31 March 2025, the GEPF provided pension and other benefits to 1 267 539 active members and 565 221 pensioners and beneficiaries.

During the year, the Government Pensions Administration Agency (GPAA) processed 39 568 retirement cases, up from 35 523 in 2024. The GPAA is a government component which reports to the Minister of Finance and administers funds and schemes on behalf of the GEPF.

Gratuity payments totalled R25.9 billion, while annuities paid amounted to R86.6bn. The GEPF said R29.1bn was disbursed in resignation benefits to 22 452 claimants while R6.6bn was paid out in lump-sum death benefits for 5 738 claims.

The GPAA faced a particularly demanding year following a cybersecurity breach in 2024. The challenge was compounded on 1 September 2024, when the new Two-Pot retirement system came into effect.

Despite limited preparation time, the GEPF received an unprecedented 691 501 withdrawal applications and paid 564 547 claims, totalling R14.37bn. The average withdrawal value was R23 554.

The Fund called this rapid and large-scale processing a significant achievement, given both the legislative delays and the sudden spike in applications once the system went live.

Overall, GPAA performance fell below the service benchmarks set in its Service Level Agreement with the GEPF.

In August, the GEPF sounded the alarm on potential reputational risks stemming from serious allegations of maladministration and financial mismanagement at the GPAA.

The GPAA has been rocked by allegations of serious financial mismanagement of pension funds amounting to more than R500 million after an audit being prepared for the financial year end flagged administration issues.

This resulted in the Finance Minister Enoch Godongwana placing CEO Kedibone Madiehe on precautionary suspension with full pay as her tenure has recently come under sharp scrutiny over allegations of procurement irregularities. 

Godongwana then appointed veteran executive Job Stadi Mngomezulu as acting CEO of the GPAA after seconding him from the National Treasury.

Mngomezulu has suspended two senior executives, the acting chief financial officer (CFO) and the acting chief director of client relations management, who are implicated in the allegations. 

The GEPF said it continues to engage the GPAA on improving service standards, but emphasised that an accelerated modernisation programme is expected to address key administrative bottlenecks, strengthen IT systems and improve security.

"The overall GPAA administration against performance for the financial year 2024/25 was below the benchmark stipulated by the Service Level Agreement (SLA)," it said.

"The GEPF has been engaging the GPAA on strategies to improve its service levels, however it is envisioned that the accelerated and enhanced modernisation project will address most of the administration challenges that the members face and build more resilient and secure IT systems."

BUSINESS REPORT