GEPF is required to invest 90% of its assets in South Africa, and as such remains the single largest investor in the Johannesburg Stock Exchange. It has an international allocation limit of 0-5% in the rest of Africa and 5% elsewhere internationally.
"Through our commitment to Environmental, Social and Governance (ESG), GEPF plays a critical role in driving the corporate sector towards adopting sustainable business practices that generate long-term financial rewards and have a positive impact on South Africa's labour force, our communities, and the environments affected by corporate activity. However, we must never lose sight of the fact that the fund's primary role is to ensure the financial wellbeing of its members and pensioners," said principal executive officer, Abel Sithole.
GEPF's membership as of 31 March 2015 comprises 1,266,101 active members [2014: 1,276,753] and 406,395 pensioners [2014: 391,071]. The fund's accumulated funds and reserves for the reported period were R1,591bn [2014: R1,426bn]. The fund invests in a pro-growth manner, with 64% invested in equities and properties, with the remaining 36% invested in bonds and cash.
The fund receives a percentage of members' pensionable salaries as contributions. Contributions received increased in the current year by R6bn to approximately R56.48bn. This increase was mainly due to annual salary increases as well as promotional and notch increases given to members.
GEPF's investment strategy uses a liability driven approach that takes into consideration expected future benefit payments, the actuarial position, and other long-term objectives, as well as the risk to the overall solvency of the fund.
Sithole said that the performance of the fund at 14.1% was close to the benchmarked return of 14.2% and enabled the board to grant a 5.8% pension increase for the 2014 -2015 financial year.
"The increase is higher than a 100% consumer price index (CPI) as at 30 November 2015 and attests to the fund's endeavour to ensure that its investment performance enables pensioners to retain their purchasing power," said Sithole.
The annual report reaffirmed GEPF's on-going commitment to upholding the rights of its members and beneficiaries and efforts to identify and implement initiatives that would enhance their lives. These included investigations into establishing an independent complaints structure for members, continued outreach programmes such as the Road Shows, Retirement Member campaigns (aimed at members who are nearing retirement), and the use of mobile offices to service members who have difficultly travelling to GEPF's regional offices).
The report pointed out that the Government Pension Administrative Agency (GPAA), its administrative sector, paid out R78.34bn on behalf of the GEPF and endeavoured to achieve its target of paying benefits accurately. In addition, it managed to pay 91% of benefits within the prescribed period.
