Press statement dated 20June 2024
Fears about looting of the Government Employees Pension Fund (GEPF), among other things, and the consequences of the two-pot retirement system are issues that cause great uncertainty among pension fund members.
These and other issues were placed under the spotlight at Solidarity’s GEPF summit held on Thursday evening, 20 June, in Centurion.
At the summit experts in financial professions as well as other stakeholders gave their input regarding the performance of the GEPF, and they also highlighted policy problems, the impact of transformation plans and deficiencies in the investment structures of the fund.
Click here to see a broadcast of the summit.
A report on the GEPF compiled by the Solidarity Research Institute (SRI) was also presented at the summit, and in this report a large number of members indicated that they were quite concerned about the way in which the fund was mismanaged in the past, as well as the way in which the fund will be managed in future.
According to experts, the GEPF as the largest pension fund in Africa has enormous potential, even though there have been indications of mismanagement in the past. New legislation regarding the early availability of pension money now raises concerns about the possibility of mismanagement and looting of this fund.
“The state coffers are almost empty, and the state believes the funds should be utilised to benefit the wider South African society,” said Helgard Cronjé, Solidarity's deputy general secretary for the public industry.
According to Cronjé, the implications of the amended legislation on the two-pot system could have adverse consequences for public service workers.
“The new legislation concerning early access to pension money poses a host of dangers to both the private and the public sector. Should public service workers withdraw their pension money earlier from the fund in large numbers, the fund will suffer a major loss in the first place. The same will also happen in the private sector,” Marius Croukamp, Solidarity’s deputy general secretary for strategy, said.
In the past, irregularities at the Public Investment Corporation (PIC), of which the GEPF is the largest client, have already been pointed out by a special commission, the Mpati-Commission, which investigated mismanagement of the GEPF.
According to Cronjé, bad investments which benefitted GEPF cadres and which led to the fund suffering a loss, had therefore already been made in the past.
Solidarity is concerned about the looting of the fund that had occurred in the past and could not find any evidence that the Mpati Commission’s recommendations have indeed been implemented.
Solidarity is considering various litigation strategies that can be used against the state.
“We have already done research and our members share our concerns about the fund’s management,” Cronjé said.
Helgard Cronjé
Solidarity: Deputy General Secretary for the Public Industry
084 336 8561
Marius Croukamp
Solidarity: Deputy General Secretary, Strategy
027 83 454 6018
Get other news reports at the SA Labour News home page