Business Times writes that concerns about the funding and governance of state pensions continue to plague the Government Employees Pension Fund (GEPF), leaving members and pensioners anxious.
Last week, Adamus Stemmet, spokesperson for the Association of Monitoring and Advocacy of Government Pensions (AMAGP), said conflicting statements from the GEPF about the certainty of long-term funding were “creating a lot of anxiety”.
In April, the GEPF assured pensioners of the fund’s stability – but this month it acknowledged the possibility that the pensioners might lose their increases. The long-term funding shortfall is an estimated R583bn, meaning the fund level would be at 75,5%. Trustees aim to maintain the long-term funding level at or above 100%, which is the current status of the fund.
Stemmet said the AMAGP was in discussions with the Public Protector about how civil servants’ pension monies were invested. Abel Sithole, the GEPF’s principal executive officer, said despite a decline in long-term funding levels, the fund was not in danger of a depletion of its assets. “We are nowhere close to that.”
He said a high number of resignations, a drop in investment returns for the first time in four years, and pension increases were among the factors affecting funding levels. Sithole indicated that the GEPF was considering options to improve the projected funding shortfall. Those included paying below-inflation pension increases, which the GEPF trustees were reluctant to do. Other options were for government and unions to agree to lower wage settlements, or to ask government to contribute more than 14,4%.