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 while addressing crucial challenges in retirement savings.

The introduction of the two-pot system allows employees to access a portion of their savings sooner, sparking discussions on its implications for the sustainability and adequacy of retirement funds for South Africans.

As the largest pension fund in Africa, GEPF is central to this dialogue. Let’s examine the related risks, necessary adjustments, and the future of retirement security.

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

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

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

JEREMY MAGGS: After three decades of strategic advancements, how do you foresee its growth in light of changing circumstances?

FRANS BALENI: It is crucial for us to reassess our strategy to align with global trends. Recent conflicts in Iran led to a R200 billion dip in our investments within just one week, highlighting the importance of being prepared for such challenges.

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

Additionally, we are prioritizing infrastructure development as part of our investment approach, understanding that achieving substantial returns is essential for the fund’s continued sustainability.

At the same time, we must confront the economic challenges our nation is grappling with.

The troubling unemployment rates underline a pressing need for job creation to promote pension growth. Generating job opportunities and enhancing contributions to retirement funds are vital for economic progress.

Our vision includes seeking opportunities beyond South Africa.

During my recent trip to Nairobi, I witnessed remarkable progress in East Africa. We should take inspiration from their successes to expand our fund.

JEREMY MAGGS:

FRANS BALENI: Certainly, effective risk management is paramount. We must move forward with caution, as our offerings do not include grants.

For instance, I propose the establishment of a dedicated fund to ensure sustainability from the project’s outset.

In the past, we’ve been the dominant investor in mining, but we lacked an exploration fund until now; we’ve recently established one to support new initiatives.

Currently, we’re taking calculated risks, aware that returns may be gradual.

JEREMY MAGGS: What percentage of members do you anticipate will sustain their living standards post-retirement? Is the fund transparent regarding this issue?

FRANS BALENI: This is a complex issue; many retirees face challenges due to significant family responsibilities. However, some members adapt successfully.

Challenges often emerge when retirees assume financial responsibilities, such as supporting grandchildren or other relatives, greatly affecting their financial well-being.

Consequently, we’ve raised concerns about the two-pot system, as it complicates the retirement landscape.

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

In the current economic climate, it seems unlikely that this trend will reverse.

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

If stagnation continues, employed South Africans will face increasing financial challenges.

JEREMY MAGGS: As you pointed out, 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 outside South Africa. We are diversifying our investments across the continent and into Europe.

Nonetheless, given our commitment to South Africa, we must actively strive to rejuvenate the economy and yield returns for our over 1.7 million members, both active contributors and retirees.

JEREMY MAGGS: Should we consider stricter regulations on members’ access to their savings? Would financial counseling, debt relief, or enhanced planning services be beneficial?

FRANS BALENI: We have examined models from the U.S. that allow borrowing under strict repayment conditions. Limiting repeated borrowing could be advantageous.

However, current regulations do not support such frameworks. Withdrawals remain designated as such until legislative changes occur.

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

FRANS BALENI: It’s a delicate balance. The discussions around the two-pot system were extensive and carefully considered before we reached a conclusion.

Listen/read:
Financial stress rises 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 regarding the two-pot system, but I regret that labor unions advocated for member access due to pressing needs.

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