GEPF Focuses on Infrastructure Investments to Boost Returns in Uncertain Markets

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JEREMY MAGGS: The Government Employees Pension Fund (GEPF) is marking its 30th anniversary during a period when retirement savings are encountering significant challenges.

The implementation of the two-pot system has enabled employees to access portions of their savings earlier; however, this has sparked concerns regarding early withdrawals, inadequate preservation, and whether South Africans will have enough funds for a dignified retirement.

As the largest pension fund in Africa, the GEPF is integral to this conversation, and I aim to discuss risks, reforms, and the future of retirement security.

I’m here with Frans Baleni, the chair of the Government Employees Pension Fund. Mr. Baleni, it’s a pleasure to have you here. As you commemorate 30 years, do you view this as a sign of a robust fund, or are you sidestepping a deeper conversation about whether public servants are retiring satisfactorily?

FRANS BALENI: These three decades have been dedicated to securing the retirement funds of public servants, and I believe the fund has performed exceptionally well over the years.

At no point has the fund required assistance from the National Treasury to cover any deficits, indicating that the investments made over these past 30 years have generated positive returns.

JEREMY MAGGS: Considering the strategy you’ve followed for the last three decades, as you look toward an uncertain future, how do you foresee this strategy changing?

FRANS BALENI: Jeremy, it must evolve due to geopolitical shifts. For example, the recent conflict in Iran resulted in a loss of R200 billion from our investments in just one week. Adaptation is vital in response to such events.

Listen/read: GEPF portfolio increases 13% to R2.69trn [Nov 2025]

Furthermore, in our strategic investments, we will concentrate on infrastructure development as part of our investment portfolio, recognizing that while protecting the fund, we also need to ensure solid returns.

At the same time, we must contribute to tackling our nation’s economic challenges.

With the high unemployment rate, I often mention, Jeremy, no job means no pension. Thus, increasing employment and contributions to retirement funds is essential for economic stability.

Our focus also extends beyond the borders of South Africa.

Recently, I returned from Nairobi, where East Africa is achieving remarkable advancements. We need to learn from their successes and seek opportunities for the fund’s growth.

JEREMY MAGGS: Managing this situation presents challenges. While infrastructure development is vital for the economy, investing in such projects inherently involves higher risks, correct?

FRANS BALENI: Indeed, risks are present. We need to be strategic in our approach, knowing that we don’t provide grants.

For instance, Jeremy, when we take on a project, I push for the establishment of a fund to guarantee the project’s feasibility, as reaching that stage is critical.

We are the largest investor in mining projects, yet initially lacked an exploration fund. We recently set one up to create a pipeline.

We are making smaller, cautious risks, but we understand that returns will follow.

JEREMY MAGGS: In terms of your members, how many do you think will maintain their standard of living post-retirement? Is the fund transparent about that number?

FRANS BALENI: It’s a complex question, as some retirees face difficulties due to additional responsibilities. However, a single individual may cope well.

Read: Why withdrawing your pension from the GEPF could be your worst financial decision

The challenge arises when retirees must support grandchildren and other family members, leading to additional strain.

This is why we have been discouraging the two-pot system, as previously mentioned, since it poses challenges at retirement.

JEREMY MAGGS: And that’s the essence of the issue. Many perceive the two-pot system not as true retirement reform but as an acknowledgment that South Africans need emergency access to their long-term savings due to financial stress.

Frans Baleni, given this economic climate, it seems unlikely that this dynamic will change.

FRANS BALENI: Indeed. The only solution lies in the creation of jobs and opportunities, so individuals aren’t pressured by familial responsibilities. That remains essential.

If we remain stagnant, working South Africans will continue to fall deeper into financial hardship.

JEREMY MAGGS: The fund, as you’ve mentioned, is closely linked to South Africa’s economy. How challenging will it be to protect members when growth is slow and unemployment is high?

FRANS BALENI: This is why our strategy includes looking beyond South Africa. Our investments reach across the continent and into Europe.

However, given our stakes within South Africa, we must do everything possible to stimulate the economy and secure returns for our members, who number over 1.7 million, including both active contributors and pensioners.

JEREMY MAGGS: Do you believe members should face stricter regulations before accessing their savings? Perhaps mandatory counseling, debt support, or enhanced financial planning services?

FRANS BALENI: We’ve considered models from the US, where borrowing is allowed but has stringent repayment conditions. Limiting recurrent borrowing can be beneficial.

Unfortunately, current legislation does not support this. A withdrawal remains just that unless changes are made by lawmakers.

JEREMY MAGGS: So we might require stricter preservation laws. Yet, could that inadvertently penalize workers already struggling with debt, inflation, and family obligations?

FRANS BALENI: It’s a delicate balancing act. The debate over the two-pot system continued for a long time before it was adopted.

Listen/read:
Financial stress deepens as the middle class faces escalating financial strain [Nov 2025]
Two-pot withdrawals: Where was the money spent? [May 2025]

I opposed the two-pot system, but unfortunately, trade unions insisted on access to funds due to member pressures.

JEREMY MAGGS: Thank you for your insights. Frans Baleni, it’s been a pleasure speaking with you. He is the chair of the Government Employees Pension Fund.