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Business Times reports that the Government Employees Pension Fund (GEPF) has dismissed calls for a pension contribution holiday with the aim of directing the money instead to boosting state coffers.
The fund manages R2.3-trillion in assets on behalf of 1.2-million state employees. GEPF chair Frans Baleni told journalists at a round-table on Thursday that the retirement fund had been approached by the Treasury to investigate the feasibility of such a contribution break, but it warned of the dangers of such a proposal. “An enquiry was made to us by National Treasury, and we did look into the matter. First, it is not possible for a zero-contribution pause. That said, we were able to indicate that there’s a possibility of a percentage reduction of [a particular amount]; anything above that would be detrimental to the fund,” Baleni indicated.
Earlier this year at the height of the budget impasse, labour federation Cosatu had urged the Treasury to initiate discussions with the fund in a bid to raise about R53bn through withholding the employer portion of pension payments for a year. “Right now the GEPF is funded at 110% of its capacity, which means that it can afford for everybody to retire tomorrow, not receive another contribution and still have change. So it’s overfunded and, look, you can’t do it forever but there is space to have a one-year contribution holiday – that’s R53bn,” said Cosatu’s Matthew Parks in February.
Baleni also said with regards to the performance of the GEPF’s investments managed by the Public Investment Corporation (PIC) that the listed entities were doing well. “Overall, it is 96% performing; it is only 4% of the unlisted investments where we’re experiencing underperformance. We’re not taking it lightly,” he said.
- Read the full original of the report in the above regard by Dineo Faku at Business Times (subscriber access only)
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