GEPF’s 2021 actuarial valuation released


The Board of the Government Employees Pension Fund (GEPF) has released a 2021 actuarial assessment of the fund, which was conducted by African Native Actuarial Solutions, and peer-reviewed by Alexander Forbes Financial Services.

The last evaluation was done as of 2018, and the next evaluation date will be 2023.

This report was prepared in accordance with the Government Employees Pension Act, which requires that the financial position of the fund be examined and reported by the assessor at least once every three years.

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It has been the practice that a statutory actuarial assessment is conducted biennially; However, as a result of unusual events related to the COVID-19 pandemic that occurred in March 2020, the Fund has decided to conduct only an interim assessment till March 31, 2020.

Actuarial assessments for 2014, 2016, 2018 and 2021 are available on the GEPF website Here,

funding level

The level of funding reflects the health of the fund:

  • The minimum funding level of 90% is the fund’s primary funding objective, and is calculated by dividing the fair value of assets (total funds and reserves) by liabilities (excluding contingent reserves). Minimum funding level increased from 108.3% to 110.1%.
  • The long-term funding level, where the trustees have a minimum target of 100%, decreased from 75.5% to 74.3%. This means: “The Fund does not have sufficient assets to fully cover the Recommended Solvency Reserve and other Contingency Reserves … an amount of R186 827 million is available to cover these reserves, which means that the Recommended Reserves of 20.9% is funded.” The long-term funding level is calculated by dividing the fair value of assets by total liabilities, including contingent reserves.

Actuaries have confirmed that “the fund was in a sound financial position” as of March 31, 2021.


Actuarial Highlights for Four Financial Years to 31 March (Rm)

2021 2018 2016 2014
Fair Value of the asset (A) 2 041 346 1 800 068 1 629 923 1 425 719
Total accrued service liabilities (B) 1 854 519 1 662 640 1 407 177 1 173 516
Total Value of Contingency Reserves 892 840 720 893 647 048 541 375
Total Long Term Liabilities (C) 2 747 359 2 383 533 2 054 225 1 714 891
Minimum Funding Level (A/Bx100) 110.1% 108.3% 115.8% 121.5%
Long term funding level (A/CX 100) 74.3% 75.5% 79.3% 83.1%

Rule amendments since last evaluation date

  • A rule amendment was gazetted in 2018 to allow for discrimination of provisions of applicable periods and benefits due to voluntary and compulsory demilitarization with respect to members of the South African National Defense Force.
  • A rule amendment was gazetted in 2018 to make provision for replacement of orphans’ pension with children’s pension, at a higher level of 25% of the core member’s pension.
  • A rule amendment was gazetted in 2019 to make a provision to replace the divorce loan approach with a view to reduction in pensionable service.
  • A rule amendment was gazetted in 2019 to provide that a member, on retirement or retirement, can reduce either gratuity or annuity in favor of enhanced pension of the spouse.

pension increases

The pension enhancement given to pensioners during the assessment period was as follows:

date of increase increase CPI* (for the year ended 30th November) Growth as a % of CPI as on 1st April
1 April 2018 5.5% 4.6% 119.6%
1 April 2019 5.2% 5.2% 100%
April 1, 2020 3.6% 3.6% 100%
April 1, 2021 3.2% 3.2% 100%

* consumer price Index

The pension increase was taken into account in the valuation of the fund’s liabilities up to March 31, 2021.

pension enhancement policy

“The objective of the fund is to provide a minimum pension increase of, if affordable, 75% of inflation, subject to the minimum pension of the basic pension increased to 75% of absolute inflation”.

The Trustees may approve the recommendation for enhancement of pension provided that:

  • the fund’s funding level exceeds the minimum funding level after the recommended growth; either
  • The employer has committed to pay such amounts, which will, within the next three years, raise the funding level to the minimum funding level, after the recommended increase.

An additional reserve has been set up to allow more discretion to the trustees in granting a pension increase of 100% of the CPI.

Members, Retirees and Dependents

The number of active members has decreased from 1 281 823 to 1 270 444 in the evaluation period.

The number of retirees has increased from 286 831 to 315 397, the number of dependents has increased from 153 590 to 162 916 and the number of child pensioners has increased from 1 204 to 7 312.

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“During the assessment period, the annual pension increased by an average of 4.0% per annum. This is lower than the long-term average rate of increase in annual pension estimated at the previous assessment date, i.e. 5.2% per annum,” notes the report.

“We are satisfied that the appropriateness of the fund’s investment strategy, the nature of the fund’s assets and the matching of assets with liabilities is, in our opinion, sufficient,” the assessors confirmed.

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