1. GEPF Presentation to SCoF
14 November 2017

2. Dr Renosi Mokate – Chairperson
GEPF Delegation
Dr Renosi Mokate – Chairperson
Major General Dries de Wit – Vice Chairperson
Mr Seth Makhani – Chairperson: Finance and Audit Committee
Mr Abel Sithole – Principal Executive Officer
Ms Linda Mateza – Head: Investments and Actuarial
Ms Adri van Niekerk – Company Secretary
Mr Musa Mabesa – Finance Manager
Ms Matau Molapo - Communications

3. Agenda Overview of the GEPF Governance Financial Highlights
Investment Highlights
Administrative Highlights
Communication and Stakeholder Engagement Highlights
Governance Highlights

4. Overview of the GEPF GEPF is the largest pension fund in Africa
Defined Benefit Fund
Assets of R1,67 trillion
active members
Pensioners & Beneficiaries
Government is the sponsor of the Fund
Juristic Entity – separate from Government

5. Regulatory Environment
Pension Fund established by the Government Employees Pension Law of 1996
Objective: To provide pensions and other related benefits as determined in the GEP Law to members, pensioners and their beneficiaries

6. Governance Executive Authority – Board of Trustees
Members and employers have equal representation on the Board
8 employer representatives
6 employee representatives
1 pensioner representative
1 forces representative
Board shall manage the Fund in terms of the powers, and duties conferred upon it as per the GEP Law.
Board ensures the effective and efficient administration of the Fund and is accountable for the investment performance.
Written Question 1

7. GEPF Board Governance
Board of Trustees
Accountable for the strategic management of the Fund
Benefits and Administration Committee
Finance and Audit Committee
Governance and Legal Committee
Investment Committee
Remuneration Committee
Valuations Sub Committee
Social and Ethics Sub Committee
Committee structures are aligned to the strategic objectives of the Fund.
Provide oversight and monitoring of outsourced services.

8. Questions on Presentation
Operating Model
Outsourced Investment and Administration functions.
Investments – PIC and other investment managers
Governed by the Investment mandate.
Administration – Government Pensions Administration Agency
Governed by an Administrative Agreement and SLA
Master Custodian
Other Service Providers:
External Auditors
Valuator
Legal, etc.
Questions on Presentation
21 & 22

9. Financial Highlights

10. Questions on Presentation
Investment Portfolio: Annual to 31 March each year
Questions on Presentation 1
R billions

11. Questions on Presentation
Return on Investments: Annual to 31 March each year
Questions on Presentation
4 & 5 %

12. Contributions Received: Annual to 31 March each year
R billions

13. Benefits Awarded: Annual to 31 March each year
R billions

14. Questions on Presentation
Financial Position: 31 March 2016
DATE
FUNDING LEVEL %
VALUATOR
31 March 2008
100.0*
Alexander Forbes Financial Services
31 March 2010
31 March 2012
Towers Watson
31 March 2014
31 March 2016
Affordable reserves determined by Valuator – Actuary appointed ito GEP
Law and Rules
Actuary propose assumptions – Board approves
Next statutory valuation – 31 March 2018
Questions on Presentation
8, 9 & 10

15. Pension Increases: Annual to 31 March each year
Questions on Presentation 12
Date of Increase
Pension Increase (excluding CPI catch-up)
CPI catch-up (percent of CPI)
Year-on-year inflation (CPI)
Pension increase awarded as a % of inflation
1 April 2006
4.50%
90%
3.35%
134.33%
1 April 2007
5.50%
100%
5.41%
101.66%
1 April 2008
7.00%
8.42%
83.14%
1 April 2009
9.00%
11.76%
76.53%
1 April 2010
5.60%
4.82%
116.18%
1 April 2011
3.58%
125.70%
1 April 2012
4.80%
6.12%
78.43%
1 April 2013
6.00%
107.14%
1 April 2014
5.30%
100.00%
1 April 2015
5.80%
1 April 2016
110.4%
1 April 2017
6.6%

16. Investment Highlights

17. Written Questions
4 & 9
Investment Mandate
Most GEPF investments are managed by the Public Investment Corporation (PIC).
Investment mandate was introduced in 2007.
Legal document through which the GEPF appoints PIC as an investment manager with the authority to act as its agent in managing and administering investments on behalf of GEPF.
Investment mandate is subject to specified investment guidelines regarding:
The Strategic Asset Allocation (SAA) agreed to with the Minister of Finance in fulfilment of section 6(7) of the GEP Law
The investment portfolio structure, risk parameters, benchmarks and fee arrangements.
Written Questions
5 & 13

18. Strategic Asset Allocation - 31 March 2017
Asset Class
Guideline %
Actual
2017
Cash and Money Markets
0 – 8 4
Domestic Bonds
26 – 36 34
Domestic Property
3 – 7 6
Domestic Equity
45 – 55 49
Africa Equity
0 – 5 1
Foreign Bonds
0 – 4
Foreign Equity
1 – 5 5
Total
100

19. Bills and Bonds
Written Question 3

20. Investment Summary

21. Investment Managers
Written Question
6 & 7

22. Unlisted Investments Isibaya Fund I (around R30 billion)
Isibaya Fund II (R70 billion committed in 2016)
Private Equity
South African Private Equity Fund II (R8.5billion)
Rest of Africa Private Equity Fund I (R6.5 billion)
Developmental Investments
The GEPF aims to invest 5% of total assets in Developmental Investments (DI).
The DI portfolio managed by the PIC on behalf of GEPF is as structured as follows:
Energy infrastructure
Social infrastructure
Economic infrastructure
Priority Sectors
SME Fund
Environmental Infrastructure
Rest of Africa Developmental Investments

23. Questions on Presentation
Investment Monitoring
Performance monitoring through the master custodian:
Detailed monthly reports
Compliance reports
Performance monitoring through the PIC:
Monthly summary reports
Detailed quarterly reports
Presentation and written report to GEPF Investment Committee
Economic overview
Asset allocation and portfolio holdings
Investment performance and attribution analysis
Per asset class: performance, outlook, strategy
Specific investments (e.g. underperforming, in the media etc.)
Questions on Presentation 20

24. Responsible Investing
The GEPF believes in integrating Environmental, Social and Governance (ESG) factors into investment decisions.
Founding signatory to the United Nations backed Principles for Responsible Investment.
Founding signatory of the Code for Responsible Investing in South Africa (CRISA).
The Fund recognises its role in Society, specifically the commitment to integrate ESG factors into its investment policies for the long-term sustainability of the Fund.
Shareholder engagement also takes place according to the policy.

25. Administrative Highlights

26. Benefit Enhancements
Finalised negotiations on the following benefit changes/enhancements
AVC
Preservation Fund
Increased Funeral Benefits (Gazetted)
Child’s Pension
Market Value Adjustment (Gazetted)
Benefit Discharge Anomaly (Gazetted)
100% of CPI Pension Increases
Written Question 10

27. Member Services Visits to GEPF Office – 482 908
Telephone Enquires –
Mobile Office –
97% satisfaction rating
Implemented a queue management system
Electronic submission of claims
Self-service function in pilot phase

28. Unclaimed Benefits

29. Unclaimed Benefits – Age Analysis 31 March 2016
Period
AMOUNT
Amount Percentage %
Case
Cases Percentage %
0.12
286
1.76
0.28
316
1.95
0.26
569
3.50
1.10
900
5.54
0.92
502
3.09
1.68
602
3.71
1.64
676
4.16
16.66
3 534
21.75
13.60
3 064
18.86
63.73
5 796
35.68
Grand Total
100
16 245

30. Communication and Stakeholder Engagement Highlights

31. Communication Roadshows Retirement Member Campaigns
7 Provinces visited – attendees
Retirement Member Campaigns
Member guide condensed into Z-folder
News letters
Mobile Vans
Media campaigns

32. Stakeholder Interaction
Presentations to PSCBC
Various Labour Unions
Pensioner Organisations
Written Question 10

33. Governance Highlights

34. Governance
20th Unqualified Audit Report
Reviewed all governance related policies
Reviewed Board Charter
Approved Combined Assurance Model

35. Thank you