SA’s sluggish economic performance impacts Government Employees Pension Fund
CNBC Africa spoke to Abel Sithole, Principal Executive Officer at GEPF on the reduction in pension fund returns and the safety of Government Employees Pensions from being used to save sailing SOEs.
Tue, 31 Oct 2017 15:06:20 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- The GEPF has experienced a decline in returns over the past two years, attributed to the country's economic struggles.
- Sithole highlighted the fund's diversified portfolio as a factor mitigating the impact of reduced returns.
- The legal framework protects pension fund assets, ensuring the security of government employees' pensions.
The Government Employees Pension Fund (GEPF) has been facing challenges with reduced returns, leading to concerns about the safety of government employees' pensions. Abel Sithole, the Principal Executive Officer at the GEPF, highlighted the decreasing returns over the past two years, emphasizing that the fund had previously performed well until the financial crisis in 2009. Sithole explained that the fund's performance is closely tied to the overall economy, and as South Africa has been struggling economically, the GEPF returns have also taken a hit, dropping to around 4%. Despite this reduction, Sithole reassured that the fund's diversified portfolio, extending beyond the listed market, has helped cushion some of the impact. However, the sluggish economic performance has raised concerns about the security of pensions. Sithole addressed these worries by highlighting the legal protections in place for pension funds. He noted that pension funds, including the GEPF, are legal entities, and any attempt to access their assets would require engaging with the entities through legal processes. This legal framework serves as a safeguard against the unauthorized seizure of pension fund assets, providing a level of protection for government employees' pensions.
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