Government Employees Pension Fund is stable, we hold PIC to account - GEPF chair

Stephen Grootes is joined by GEPF board chair Frans Baleni on The Money Show.

The Public Investment Corporation (PIC) has had some bad press lately, with the most recent being another bailout of the struggling Daybreak Farms enterprise.

As the PIC manages the bulk of investments for the Government Employees Pension Fund, Stephen Grootes asked GEPF board chairperson Frans Baleni if government workers run any risk with their retirement money.

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Baleni lists some impressive figures to illustrate how stable the Fund is, and how it's grown since its formation almost 30 years ago.

"At its formation in terms of the Government Employees Pension Law in 1996 the funding level was about 70%; now we are sitting at 119%, which shows you the level of stability of the fund."

Frans Baleni, Chair - Government Employees Pension Fund

"In the 2023/24 financial year we paid R142 billion in benefits while the contributions received were R92 billion... How did we make up that shortfall? It's because of the good investments we've made over a period of time, including R52 billion dividend income and R116 billion net investment income."

Frans Baleni, Chair - Government Employees Pension Fund

The Fund simply cannot afford to have any gaps, Baleni goes on, explaining that it is a defined benefit for which the National Treasury stands surety.

"It is in our interest as trustees to ensure that at no stage there shall be that gap - therefore the investment is properly focused investment with good returns as those numbers illustrate."

Frans Baleni, Chair - Government Employees Pension Fund

The GEPF chair also explains that having a large percentage of funds managed by the PIC is advantageous because this entity charges very low fees, making for better returns for members.

To hear more from Baleni, listen to the interview audio at the top of the article