GEPF Targets Infrastructure Investments to Enhance Returns Amid Uncertain Conditions
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JEREMY MAGGS: The Government Employees Pension Fund (GEPF) is celebrating its 30th anniversary at a time when retirement savings face significant challenges.
The introduction of the two-pot system has allowed employees to access part of their savings earlier, but this has raised concerns about early withdrawals, poor preservation, and whether South Africans will have sufficient funds for a dignified retirement.
As the largest pension fund in Africa, the GEPF plays a crucial role in this discussion, and I want to address risks, reforms, and the future of retirement security.
I’m joined by Frans Baleni, the chair of the Government Employees Pension Fund. Mr. Baleni, it’s a pleasure to have you. As you celebrate 30 years, are you acknowledging a robust fund, or avoiding a deeper discussion on whether public servants are retiring satisfactorily?
FRANS BALENI: It’s been three decades dedicated to securing public servants’ retirement funds, and I believe the fund has performed admirably over the years.
At no point has the fund had to solicit the National Treasury to cover any deficits, indicating that the investments made over these 30 years have yielded positive returns.
JEREMY MAGGS: Regarding the strategy you’ve followed for the last three decades, and as you gaze into an uncertain future, how do you anticipate this strategy will evolve?
FRANS BALENI: Jeremy, it must evolve in light of geopolitical changes. For instance, the recent conflict in Iran wiped out R200 billion from our investments within the first week. Adaptation is essential in response to such developments.
Listen/read: GEPF portfolio increases 13% to R2.69trn [Nov 2025]
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Additionally, in our strategic investments, we will focus on infrastructure development as part of our investment portfolio, as we believe that while we protect the fund, we also need to generate solid returns.
Simultaneously, we must contribute to addressing our country’s economic challenges.
Considering the elevated unemployment rate, I often say, Jeremy, no work means no pension. Therefore, we need to increase employment and contributions to retirement funds to stabilize the economy.
Our focus also extends beyond South Africa.
Recently, I returned from Nairobi, where East Africa is making remarkable progress. We need to learn from their successes and explore growth opportunities for the fund.
JEREMY MAGGS: Managing this poses challenges. On one hand, infrastructure growth is crucial for the economy, yet investing in such projects undoubtedly carries higher risks, right?
FRANS BALENI: Indeed, risks exist. We must be calculated in our actions, as we don’t provide grants.
Let me give you an example, Jeremy. When we embark on a project, I advocate for establishing a fund to ensure the project’s bankability, as reaching that stage is crucial.
We are the largest investor in mining ventures, yet initially lacked an exploration fund. We recently allocated one to create a pipeline.
We are taking smaller risks, but we are careful, knowing that returns will follow.
JEREMY MAGGS: Regarding your members, how many do you believe will maintain their standard of living after retirement? Is the fund candid about that figure?
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FRANS BALENI: It’s a complex issue since some retirees are struggling due to additional responsibilities. However, a single individual can manage adequately.
Read: Why withdrawing your pension from the GEPF could be your worst financial decision
But the issue arises when retirees have to support grandchildren and other family members, putting additional strain on them.
This is why we have been discouraging the two-pot system, as previously mentioned, because it creates challenges at retirement.
JEREMY MAGGS: And that is the crux of the matter. The two-pot system is perceived by many not as genuine 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 landscape, it’s unlikely that this dynamic will shift.
FRANS BALENI: That’s true. The only solution lies in creating jobs and job opportunities, so individuals aren’t pressured by family responsibilities. That remains crucial.
If we remain stagnant, working South Africans will continue to plunge deeper into financial difficulties.
JEREMY MAGGS: The fund, as you’ve noted, is markedly intertwined with South Africa’s economy. How challenging will it be to safeguard members when growth is sluggish and unemployment is rampant?
FRANS BALENI: This is why our strategy entails looking beyond South Africa. Our investments span the continent and even into Europe.
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However, given our exposure in South Africa, we must do everything possible to stimulate the economy and secure returns for our members, which include over 1.7 million individuals, counting both active contributors and pensioners.
JEREMY MAGGS: Do you believe that members should face stricter regulations before accessing their savings? Perhaps mandatory counseling, debt support, or improved financial planning services?
FRANS BALENI: We’ve examined models from the US, where borrowing is permitted but comes with strict repayment conditions. Limiting recurrent borrowing can help.
Regrettably, current legislation lacks such provisions. A withdrawal remains simply a withdrawal unless amendments are made by lawmakers.
JEREMY MAGGS: So we might require stricter preservation laws. Yet, could that inadvertently punish workers already caught in debt, inflation, and familial obligations?
FRANS BALENI: It’s a delicate balance. The debate surrounding the two-pot system persisted for a long time prior to its introduction.
Listen/read:
Financial stress deepens as middle class faces mounting money 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.