GEPF Focuses on Infrastructure Investments to Boost Returns Amid Market Volatility

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JEREMY MAGGS: The Government Employees Pension Fund (GEPF) is marking its 30th anniversary while addressing significant challenges in retirement savings.

The introduction of the two-pot system enables employees to withdraw a portion of their savings earlier, sparking conversations about its implications for the sustainability and adequacy of retirement funds for South Africans.

As Africa’s largest pension fund, GEPF is central to this dialogue. Let’s delve into the associated risks, necessary adjustments, and the outlook for retirement security.

I’m excited to welcome Frans Baleni, chairperson of the Government Employees Pension Fund, to our discussion today. Congratulations, Mr. Baleni, on this remarkable achievement! Do you view this milestone as a reflection of the fund’s resilience, or do persistent concerns about public servants’ retirement security remain?

FRANS BALENI: We are fully committed to protecting the retirement savings of public servants, and I have great confidence in the fund’s performance.

Notably, the fund has never needed supplementary funding from the National Treasury, demonstrating our effective investment strategy over the past thirty years.

JEREMY MAGGS: After three decades of strategic initiatives, how do you foresee its growth amidst changing circumstances?

FRANS BALENI: It’s essential for us to reassess our strategy to align with global trends. Recent conflicts in Iran led to a R200 billion drop in our investments in just one week, highlighting the need for readiness against such challenges.

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

We are also prioritizing infrastructure development as part of our investment strategy, as generating substantial returns is crucial for the fund’s ongoing stability.

At the same time, we must address the economic challenges our nation is currently facing.

The alarming unemployment rates indicate a pressing need for job creation to promote pension growth. Creating job opportunities and strengthening contributions to retirement funds are vital for economic progress.

Our vision includes seeking opportunities beyond South Africa.

My recent trip to Nairobi revealed impressive advancements in East Africa. We should take inspiration from their successes to expand our fund.

JEREMY MAGGS:

FRANS BALENI: Absolutely; effective risk management is essential. We must approach this carefully, as our offerings do not include grants.

For example, Jeremy, I suggest establishing a dedicated fund to ensure sustainability from the project’s inception.

Historically, we’ve been the top investor in mining but didn’t have an exploration fund until recently; we’ve just launched one to support new initiatives.

Currently, we are taking on smaller, well-calculated risks, understanding that returns may take time.

JEREMY MAGGS: What percentage of members do you anticipate will maintain their standard of living after retirement? Is the fund transparent regarding this situation?

FRANS BALENI: This is a complex issue; numerous retirees face challenges due to significant family responsibilities. Nonetheless, some adapt quite well.

Issues often arise when retirees take on financial burdens, such as supporting grandchildren or other relatives, which heavily affects their financial well-being.

Consequently, we have voiced concerns about the two-pot system, as it complicates the retirement landscape.

JEREMY MAGGS: This highlights a key point. Many view the two-pot system not as genuine reform but as recognition that South Africans urgently need access to their long-term savings due to financial stress.

Given the current economic environment, it appears unlikely that this trend will reverse.

FRANS BALENI: Indeed, focusing on job creation and fostering opportunities is crucial to alleviate family pressures. This remains a priority.

If we continue to see stagnation, employed South Africans will face mounting financial challenges.

JEREMY MAGGS: As you mentioned, the fund is closely linked to the South African economy. How challenging will it be to support members during periods of low growth and high unemployment?

FRANS BALENI: That’s why our strategy emphasizes exploring opportunities beyond South Africa. We are diversifying our investments across the continent and into Europe.

However, given our commitment to South Africa, we must make intentional efforts to revitalize the economy and generate returns for our over 1.7 million members, including both active contributors and retirees.

JEREMY MAGGS: Should we consider stricter regulations on member access to their savings? What about offering financial counseling, debt relief, or better planning services?

FRANS BALENI: We have evaluated models from the U.S. that allow borrowing under strict repayment conditions. Restricting repeated borrowing could be beneficial.

However, as of now, regulations do not support such frameworks. Withdrawals are classified as such until legislative changes occur.

JEREMY MAGGS: Stricter preservation laws might be necessary, but could this inadvertently worsen situations for workers already facing debt, inflation, and family responsibilities?

FRANS BALENI: It’s a delicate balance. The conversations surrounding the two-pot system were long and thorough before coming to a conclusion.

Listen/read:
Financial stress increases as the middle class grapples with growing financial pressures [Nov 2025]
Two-pot withdrawals: What does the future hold for the funds? [May 2025]

I initially had reservations about the two-pot system, but I regret that labor unions advocated for member access due to urgent needs.

JEREMY MAGGS: Thank you for sharing your insights, Frans Baleni. It has been a pleasure discussing these important topics with you. He is the chair of the Government Employees Pension Fund.