[South Africa] Government Employees Pension Fund investment portfolio records 8.3 per cent growth
The Government Employees Pension Fund’s investment portfolio recorded an 8.3% growth, despite the country experiencing challenges and lack of economic growth.
This, according to the just released financial results for the 2017/18 annual report.
“GEPF’s investment portfolio grew by an impressive 8.3% from R1.6 trillion in 2017 to R1.8 trillion. This was achieved despite the South African economy only growing by 0.8% during 2017/18 financial year,” the pension fund said in a statement.
The increase on the investment portfolio was as a result of the performance in the domestic assets over the past year, particularly bonds and equities.
“Listed equities increased by 10%, domestic bills and bonds by 6%, collective investment scheme (foreign) by 7% due to new investment while unlisted equities (domestic) increased by 37% as a result of a positive fair value adjustment and additions,” GEPF Principal Executive Officer Abel Sithole said.
During the reporting period, the GEPF investments yielded an average return of 8.5% compared to 4.3% in 2017, based on the net investment income of R153 billion as compared to the R72 billion in 2017. This is a 112.76% increase.
“The GEPF’s accumulated funds and reserves have grown at an average rate of 10.21% over the past 10 years. The past year has indeed been one of renewed affirmation for GEPF, as we continue to actively fulfil our mandate to effect meaningful and sustainable change through our investments,” he said.
Sithole said the fund in the year under review experienced an increase in member contributions, with 7.3% during the reporting period, going from R65.6 billion in 2017 to R70.4 billion.
This, the GEPF said, was mainly due to salary increases to members despite the decrease in total membership of 0.05% - from 1 273 784 in 2017 to 1 273 125.
The GEPF also saw an increase in awarding of benefits to members upon resignation, retirement, death and funeral benefit where applicable. The total benefits paid during the year under review increased by R6.6 billion.
“The GEPF will continue evaluating its investment allocations with utmost care in order to achieve the most growth for its members, pensioners and beneficiaries. With this in mind, we will be considering various options with respect to diversification of investments. This is imperative to ensure that there is a lower correlation between economic growth of the country and the growth of our investment portfolio,” said Sithole.
The GEPF expressed appreciation to its implementing agencies the Public Investment Corporation (PIC) and Government Pension Administration Agency (GPAA) for the work they do to ensure that the GEPF fulfils its mandate.