GEPF Focuses on Infrastructure Investments to Boost Returns in Uncertain Times
You can also catch this podcast on iono.fm here.
JEREMY MAGGS: The Government Employees Pension Fund (GEPF) is marking its 30th anniversary amidst notable challenges in retirement savings.
The implementation of the two-pot system has given employees the option to access part of their savings earlier, raising concerns about early withdrawals, the preservation of funds, and whether South Africans will have enough for a dignified retirement.
As Africa’s largest pension fund, the GEPF is central to this conversation, and I want to discuss the associated risks, required 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 great to have you. As you celebrate 30 years, are you acknowledging a strong fund or avoiding tough discussions about public servants’ retirement satisfaction?
FRANS BALENI: We have dedicated three decades to securing the retirement funds of public servants, and I believe the fund has performed exceptionally well throughout this period.
At no point has the fund needed to reach out to the National Treasury for deficit cover, showing that the investments over these years have generated positive outcomes.
JEREMY MAGGS: Looking at your strategy over these past three decades and considering the uncertain future, how do you see this strategy evolving?
FRANS BALENI: Jeremy, the strategy must adapt to geopolitical shifts. For example, the recent conflict in Iran led to a R200 billion loss in our investments within a week. Thus, adaptation is critical in response to such changes.
Listen/read: GEPF portfolio increases 13% to R2.69trn [Nov 2025]
ADVERTISEMENT
CONTINUE READING BELOW
Furthermore, our strategic investments will increasingly focus on infrastructure development, as we believe it is vital to both protect the fund and generate solid returns.
At the same time, we need to help tackle the economic challenges facing our country.
Given the high unemployment rate, I often say, Jeremy, no work leads to no pension. Therefore, we must enhance employment and contributions to retirement funds to stabilize the economy.
Our perspective also extends beyond South Africa.
I recently returned from Nairobi, where East Africa is achieving remarkable progress. We need to learn from their successes and identify growth opportunities for our fund.
JEREMY MAGGS: Balancing this is complex. Infrastructure development is vital for the economy, yet such investments inherently carry greater risks, right?
FRANS BALENI: Absolutely, there are risks involved. We need to act responsibly as we do not offer grants.
To illustrate, Jeremy, when we undertake a project, I advocate for creating a fund to ensure the project’s bankability, as reaching that point is essential.
We are the largest investor in mining projects but initially lacked an exploration fund. We’ve recently established one to build a pipeline.
We are taking measured risks, confident that returns will follow.
JEREMY MAGGS: Regarding your members, how many do you think will retain their standard of living post-retirement? Is the fund transparent about that statistic?
ADVERTISEMENT:
CONTINUE READING BELOW
FRANS BALENI: That’s a complicated question. While some retirees manage well, many face difficulties due to additional familial responsibilities. A single individual may cope adequately.
Read: Why withdrawing your pension from the GEPF could be your worst financial decision
The challenge arises when retirees must support grandchildren or other relatives, creating additional stress.
This is why we have been discouraging the two-pot system, as previously mentioned, because it creates complications at retirement.
JEREMY MAGGS: That’s the core issue. Many see the two-pot system not as true retirement reform but as a recognition that South Africans require emergency access to their long-term savings due to financial pressures.
Frans Baleni, considering this economic environment, it is unlikely that this dynamic will change.
FRANS BALENI: That’s accurate. The real solution lies in job creation and opportunities so that individuals aren’t burdened by family obligations. This is crucial.
If we remain stagnant, working South Africans will continue to sink deeper into financial woes.
JEREMY MAGGS: The fund, as you’ve pointed out, is deeply intertwined with South Africa’s economy. How challenging will it be to protect your members when growth is slow and unemployment is high?
FRANS BALENI: This is precisely why our strategy includes looking beyond South Africa. Our investments extend across the continent and even into Europe.
ADVERTISEMENT:
CONTINUE READING BELOW
However, due to our exposure in South Africa, we must do everything possible to boost 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 that members should face stricter regulations before accessing their savings? Perhaps mandatory counseling, debt support, or enhanced financial planning services?
FRANS BALENI: We’ve looked into models from the US, where borrowing is allowed but comes with strict repayment guidelines. Capping repeated borrowing might help.
Unfortunately, existing legislation lacks such measures. A withdrawal is merely a withdrawal unless changes are implemented by lawmakers.
JEREMY MAGGS: So we might need stricter preservation laws. Yet, could that inadvertently penalize workers already trapped in debt, inflation, and familial pressures?
FRANS BALENI: It’s a delicate equilibrium. The discourse around the two-pot system lasted a long time before its implementation.
Listen/read:
Financial stress deepens as the middle class faces mounting financial strain [Nov 2025]
Two-pot withdrawals: Where was the money spent? [May 2025]
I was against the two-pot system, but regrettably, trade unions pushed for fund access due to member demands.
JEREMY MAGGS: Thank you for sharing your insights. Frans Baleni, it’s been a pleasure speaking with you. He is the chair of the Government Employees Pension Fund.