Significant declines in the Government Employees’ Pension Fund (GEPF) over the past two months has caused concern.

This follows the implementation of updated actuarial interest factors, effective from October.

Actuarial factors are formulae used to calculate the value of members’ benefits, taking into account years of service, age and final salary.

Members planning to exit the service before retirement, or who transfer their benefits to a private fund, will be affected.

The fund’s spokesperson, Matau Molapo, said these factors are based on assumptions adopted in the statutory actuarial valuation as of March 2024, and come after a ‘consultative process’ with labour unions.

Implications for members

“The revised factors have resulted in benefit values that are, on average, 15 per cent lower than those calculated using the 2021 factors.”

The result, she explained, is reduced estimated withdrawal benefits, except for death and retirement benefits.

Additionally, she said the revised factors apply to all active member records, meaning balances in all components under the two-pot retirement system will be recalculated.

Savings withdrawal benefits for members under 55 will be affected, and all resignations, regardless of years of service, will be impacted.

“Any exit involving members with fewer than 10 years of total pensionable service will be affected. Pensioners’ benefits, however, remain unchanged,” she said.

Union pushback

Representing the largest public sector union, Nehawu general secretary Zola Saphetha said they have been inundated with queries from anxious members.

“The importance of a pension fund can never be understated in creating social security for our members and workers,” said Saphetha.

“As Nehawu, we were not party to any agreement at the council and would never agree to anything that tampers with the pensions of our members without them.

“We remain unwavering and consistent in rejecting anything that will erode the value of workers’ pension funds,” he said.

The union has requested a council meeting at the Public Service Co-ordinating Bargaining Council for clarification on the matter.

Don’t have the ZO app? Download it to your Android or Apple device here:

HAVE YOUR SAY