1. Presentation to Standing Committee on Finance 12 April 2016
GEPF
Presentation to Standing Committee on Finance
12 April 2016

2. GEPF Representatives Maj Gen Dries de Wit – Vice Chairperson
Mr Abel Sithole – Principal Executive Officer
Ms Linda Mateza – Head: Investments and Actuarial
Ms Adri van Niekerk – Company Secretary

3. Agenda Overview of GEPF Mission, Vision and Values Operating Model
Fund Growth
Financial Position
2015/16 Highlights
Looking Ahead

4. Overview GEPF is currently the largest pension fund in Africa
In terms of Assets: Over R1.597 billion
1.266 m active members
406k Pensioners & Beneficiaries
One of the few DB schemes in SA
Government is the sponsor
Juristic Entity – separate from Government
Governed/Managed by a Board of Trustees
16 Member board
8 employer representatives
6 employee representatives
1 pensioner representative
1 forces representative

5. Our Vision is:
To be a global leading and reputable pension fund that delivers quality service to beneficiaries.

6. Our Mission is to:
As the Government Employees Pension Fund is the custodian of a significant portion of the wealth of public servants, our mission is to:
ensure the sustainability of the Fund;
provide for efficient delivery of benefits; and
empower our beneficiaries through effective communication.

7. We Value: Integrity Transparency Client centricity Accountability
Innovation

8. Operating Model Policy and Strategy Government Employees Pension Fund
Investment Mandate
Administration Agreement
Public Investment Corporation
Government Pension Administration Agency
Implementation

9. Fund Growth

10. Return on Investments: Annual to 31 March each year

11. Strategic Asset Allocation
Asset Class
Guideline %
Actual
2015
Cash and Money Markets
0 – 8 2
Domestic Bonds
26 – 36 32
Domestic Property
3 – 7 5
Domestic Equity
45 – 55 54
Africa Equity
0 – 5 1
Foreign Bonds
0 – 4
Foreign Equity
1 – 5 4
Total
100

12. Financial Position DATE FUNDING LEVEL % VALUATOR 1 May 1996 72.3
Ginsberg, Malan, Carson
31 March 1998
96.5
NBC Employee Benefits
31 March 2000
96.1
31 March 2001
98.1
31 March 2003
89.4
Alexander Forbes Financial Services
31 March 2004
31 March 2006
101.7
31 March 2008
100.0*
31 March 2010
31 March 2012
Towers Watson
31 March 2014
* The funding level has been determined with reference to the affordable reserves only

13. 2015/16 Highlights

14. Strategic Initiatives
Optimise Operational Model
Stakeholder Relationships
Member Benefits
Responsible Investment
Employer of Choice

15. Optimise Operational Model
Reviewed the constitution of the Board
Approved the establishment of an independent complaints handling office
Appointed a single master custodian

16. Stakeholder Relationships
Reviewed SLA with GPAA
Approved additional allocation to Developmental Investments through PIC Isibaya Fund
Benchmarked administrative and investment management services against global peers
Finalised an Integrated Communications Strategy
Enhanced relationships with key stakeholders (NT, DPSA, PSCBC and Labour Unions)

17. Member Benefits Finalised consultation on the following key benefits:
Additional Voluntary Scheme (AVC)
Voluntary Preservation Fund
Child pension
Removal of market value adjustment
Discharge benefit anomaly
Review of reduction factors in favour of an increased Spouse's pension
Clean break proposal - moving to the service adjustment approach

18. Responsible Investment
Enhanced reporting on Environmental, Social and Governance (ESG) matters
Approved additional allocation to developmental investments
Established a Social and Ethics Sub-committee to align with industry best practice

19. Employer of Choice Reviewed organisational structure
Enhanced the culture of accountability

20. Looking Ahead 2016/17 Financial Year

21. 2016/17 Strategic Initiatives
Improve benefits administration
Improve member and beneficiary communication and education
Improve investment monitoring
Improve risk management architecture
Improve stakeholder relations

22. Improve benefits administration
Accurate member database
Enhanced service delivery through modernisation of systems and processes
Sustain payment of benefits
Funding level including the review of the Asset Liability Model
Address unclaimed benefits
SMART Service Level Agreement with GPAA

23. Improve member beneficiary communication and education
Effective member education programme
Advisory capacity to imminent retirees (RMC campaigns)
Member retention to maximum statutory retirement age

24. Improve investment monitoring
Develop investment beliefs and risk appetite statements
Strengthen in-house research and monitoring capacity
Review investment policy and mandate with PIC

25. Risk Management Architecture
Review combined assurance framework
Review and enhance risk management framework
Retain an unqualified audit report status

26. Improve stakeholder relations
Instill culture of service delivery within GEPF, GPAA and PIC
Redefine role of GEPF to be conduit to other stakeholders
Design effective engagement approach with stakeholders
Create services to members by strengthening relationships

27. Budget 2016/17
Projected Income: R250,1 billion (contributions and investment returns)

29. Resignation Trend

30. Unclaimed Benefits