The Government Employees Pension Fund (GEPF), South Africa’s largest pension fund, overseeing the retirement savings of nearly 1.8 million members, has released its financial results for the year ending 31 March 2025. The report shows a strong performance overall, even amid challenges such as cybersecurity incidents, two-pot withdrawals, and investment write-offs.

Speaking on the fund’s performance, GEPF Principal Executive Officer Musa Mabesa said the 2024/25 financial year was “a good year for both the fund and the local market.” GEPF’s assets under management (AuM) increased from R2.3 trillion last year to just under R2.7 trillion, reflecting a growth of 13.1%. The fund also recorded positive returns of 14.1%, while net profits surged 89% to R512 million.

Cybersecurity Challenges and Recovery

During the year, the fund experienced a cybersecurity breach targeting its benefits administration support systems. While the core pension systems were not compromised, processing of member payments was temporarily delayed. Mabesa explained that the fund quickly implemented additional safeguards to prevent future incidents, ensuring the integrity and security of its operations moving forward.

Impact of Two-Pot Withdrawals

The introduction of the two-pot pension system last September saw significant member activity. GEPF paid approximately R14.3 billion in withdrawals between September 2024 and March 2025. Out of 691,000 applications, around 565,000 claims were approved, with an average withdrawal amount of R23,500. Mabesa noted that while early withdrawals were high, the pace has slowed since April 2025, indicating growing awareness and adoption of a savings-focused culture among members.

To support prudent financial habits, the fund maintains a R6 billion reserve account, encouraging members to leave savings intact for retirement security while still providing flexibility for genuine needs.

Portfolio Concentration and Local Investments

The fund maintains a portfolio heavily concentrated in South Africa, with roughly 86% of assets invested domestically across equities, bonds, and cash. This concentration aligns with GEPF’s rand-based liabilities, reducing currency exposure risks. The remaining 14% of assets are invested across Africa (5%) and offshore (9%), with plans to increase international diversification to 20% over time.

Top-performing local investments included shares in Gold Fields and AngloGold, demonstrating that a domestic-focused approach can still yield strong returns when carefully managed.

Relationship with the Public Investment Corporation

GEPF relies on the Public Investment Corporation (PIC) to manage about 82% of its portfolio. Despite concerns over recent PIC developments, including leadership changes and reported controversial deals, Mabesa reaffirmed the fund’s confidence in the new board and CEO. He highlighted the robustness of PIC’s systems, including over 25 appointed managers, ensuring continuity even if issues arise.

Infrastructure Investment Opportunities

Looking ahead, GEPF is closely monitoring opportunities in national infrastructure. With the Treasury planning new infrastructure bonds to fund development projects, Mabesa confirmed that the fund would explore involvement through PIC-managed channels. “Infrastructure investment is critical not only for the economy but for the sustainability of the fund itself,” he said, noting the importance of supporting South Africa’s long-term growth.

Looking Forward

Despite challenges such as cybersecurity threats, investment write-offs, and the initial surge in two-pot withdrawals, the GEPF ended the year on a positive note. With nearly R2.7 trillion in assets and ongoing opportunities for strategic investments, the fund remains a cornerstone of financial security for South Africa’s public sector employees.

FAQ

1. What is the total value of GEPF’s assets?
As of March 2025, GEPF’s portfolio is valued at just under R2.7 trillion.

2. How much was paid out in two-pot withdrawals?
Around R14.3 billion was paid out to 565,000 claimants between September 2024 and March 2025.

3. Did the cybersecurity breach affect member funds?
No, the core pension systems were not compromised, but some payment processing was delayed temporarily.

4. What percentage of GEPF’s portfolio is invested locally?
Approximately 86% is invested within South Africa, with the remainder spread across Africa and offshore.

5. How is GEPF involved in infrastructure investment?
The fund plans to participate in government-backed infrastructure bonds through the PIC, supporting national development and fund sustainability.