GEPF eyes infrastructure to boost returns in uncertain climate

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JEREMY MAGGS: The Government Employees Pension Fund (GEPF) is marking 30 years at a moment, I think, when retirement savings are under real pressure.

The two-pot system has given workers earlier access to part of their savings, but that has also sharpened concerns about early withdrawals, about poor preservation, and whether South Africans will have enough money to retire with dignity.

As Africa’s largest pension fund, the GEPF sits at the centre of this debate and I want to discuss risks, reforms and also the future of retirement security.

I’m joined by Frans Baleni, who is the chair of the Government Employees Pension Fund. Mr Baleni, a very warm welcome to you. Thirty years old, but are you celebrating a strong fund or maybe avoiding a deeper conversation about whether public servants are retiring well?

FRANS BALENI: It’s three decades of safeguarding public servants’ retirement funds, and I think the fund has done very well over so many years.

At no stage did the fund have to go and beg National Treasury to close any shortfall, which means that the investments the fund has made over these 30 years [have delivered] good returns.

JEREMY MAGGS: In terms of the strategy that you have adopted over the past three decades, and looking into a very uncertain future, how do you think that strategy is either going to stay the same, or is going to have to alter?

FRANS BALENI: Jeremy, it has to alter, given geopolitical developments. Just to give an example, with the war in Iran, in the first week it wiped out R200 billion from our investments. So clearly, it means that we have to adapt, given the developments.

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

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But also, looking at strategic investments, we are now going to be focusing on infrastructure development as part of our investment, because it’s our view that while we are preserving the fund, we need good returns.

At the same time, we’ve got to contribute to solving the economic problems of our country.

If you look at the high level of unemployment, I normally say, Jeremy, no work, no pension. So therefore, we need more people to work and contribute to their pension fund or the retirement fund so that the economy can be stable.

We’re also looking beyond the country.

I just came back from Nairobi, looking at East Africa. They are doing excellent work, so we need to take some lessons and see where we can grow the fund.

JEREMY MAGGS: It’s a difficult one to manage though, because on the one hand, the importance of infrastructure growth to the economy is critical. But on the other hand, investment in [such] projects also carries a higher degree of risk, surely?

FRANS BALENI: Clearly, there are risks. Obviously, in everything we do, we don’t provide grants – we have to calculate.

But in taking on risk, let me give you an example, Jeremy. [When] we embark on a project, I normally encourage project … that there must be a fund to assist a project to get into bankability because nobody would want to come to the bankability stage.

We are the single largest investor in the mining space, but initially we had no exploration fund. We have just now allocated an exploration fund because we are creating a pipeline.

So we are taking those small risks, but we know that we are not reckless, it will definitely be returned.

JEREMY MAGGS: As far as your members are concerned, how many are likely, do you think, to maintain their standard of living after retirement? Is the fund honest enough about that number?

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FRANS BALENI: Jeremy, it’s a tricky one in the sense that we are seeing some of those who have retired struggling because they have responsibilities beyond themselves. But if you take a unit, a person can survive quite well.

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

But the challenge is that they’ve got grandchildren and so on, and they now have to assist. Therefore, it puts pressure on them.

That’s why we have been discouraging the two-pot system, as you have alluded to in your opening remarks, because it puts a strain on at the point of retirement.

JEREMY MAGGS: And that’s the real problem. The two-pot system is seen by many not as retirement reform, but rather as an admission that working South Africans are so financially stressed that they need emergency access to long-term savings.

That dynamic, Frans Baleni, is unlikely to change given the current economic environment within which you operate.

FRANS BALENI: It’s unlikely to change. The only way of changing it, Jeremy, is to create jobs and create job opportunities, so that individuals who are working are not pressurised by extended family. So that’s the only way.

If we don’t do anything, South Africans who are working will go deeper and deeper into a minus situation.

JEREMY MAGGS: The fund, as you’ve mentioned, is deeply exposed to South Africa’s economy. How difficult is it going to become, Frans Baleni, to protect members when growth is weak, unemployment is high, and the fiscus is under continuing strain?

FRANS BALENI: That’s why, in our strategy, Jeremy, we are looking beyond South Africa. If you look at [our] investments [on] the continent, in Europe, so it goes beyond South Africa.

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Read: Planning commission punts use of Regulation 28 to redirect funds to infrastructure

But because we are so exposed in South Africa, we’ve got to do everything we can to stimulate the economy to ensure that there are returns for our members, who are over 1.7 million if you add pensioners as well.

JEREMY MAGGS: Do you think there should be stronger guardrails before members can actually access savings? I’m thinking compulsory counselling, maybe debt support, or even more access to better financial planning.

FRANS BALENI: We have looked [at] the US, where you can borrow money, but you must pay it back. Then it limits you, you can only borrow once, and you can only borrow for the second time after you have repaid the money which you have taken before.

So unfortunately, our law as it stands now does not make that provision. So a withdrawal is a withdrawal, unless the lawmakers can change it.

JEREMY MAGGS: So maybe we need tougher preservation rules. Or do you think that could punish workers who are already trapped between debt, inflation, and – as you referenced earlier – family responsibilities?

FRANS BALENI: It’s a tricky one, because before the two-pot came about, there was a long debate.

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’m one of those people who did not support the two-pot system, but unfortunately, trade unions, in the interest of their members, said: we understand everything you say, but there’s this pressure – we’ve got to have access to this money, unfortunately.

JEREMY MAGGS: I’m going to leave it there. Frans Baleni, thank you very much indeed. He is the chair of the Government Employees Pension Fund.

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