GEPF’s Abel Sithole on tackling SA’s growth challenges, Steinhoff crash

The Government Employees Pension Fund (GEPF), the largest pension fund in South Africa with close to about two trillion in assets, has a crucial role to play in the country's economic growth. In a recent interview with CNBC Africa, Abel Sithole, Principal Executive Officer of GEPF, highlighted the importance of not only meeting the fund's obligations to its members and pensioners but also investing in a way that supports the economy's growth. Sithole emphasized the need to focus on solutions and contributions to the economy, rather than just identifying challenges. One of the major issues facing pension funds, including GEPF, is the depreciation in the value of assets such as Steinhoff. Sithole clarified that while there has been a significant depreciation, amounting to about 17 billion Rand in the case of GEPF, it is crucial to understand the context. With total assets nearing two trillion Rand, the impact of the depreciation on the fund's overall benefits to members is relatively small. Sithole reassured that the depreciation in assets does not directly affect the benefits that members will receive. Addressing accountability for potential losses, Sithole emphasized the need to first establish factual evidence of wrongdoing before taking any punitive actions. He mentioned the complexity of identifying the causes of losses and the responsible parties, cautioning against hasty decisions. Sithole stressed the importance of allowing investigative processes to unfold to determine the extent of the problem and the parties at fault. Regarding concerns about South Africa's technical recession, Sithole provided clarity on the separation between pension benefits and fund investments. He assured members that their benefits are defined and determined by specific formulas, ensuring that they will receive their promised pensions regardless of investment performance. Sithole also expressed optimism about the country's economic outlook, indicating that the technical recession may be temporary and could be resolved in the near future. Looking ahead, Sithole emphasized the importance of pension funds like GEPF playing a positive role in improving the economy and encouraging other funds to do the same. He emphasized the need for proactive contributions and solutions from all stakeholders to address South Africa's economic challenges. Sithole underscored the need for collective responsibility in finding solutions and moving towards a more sustainable and prosperous economic future. In conclusion, Abel Sithole's insights shed light on the critical role of pension funds in driving economic growth and stability in South Africa. By focusing on solutions, accountability, and collaboration, GEPF aims to navigate challenges effectively and contribute to the country's long-term economic success.