fundtalk second edition for 2016 page 1 - GEPF - …

1 GEPF invest in housing scheme PAGE 3nomination forms PAGE 4 You can claim GEPF s PAGE Centre - 0800 117 669 second edition 2016 @GEPF_SAfundtalkThe quarterly newsletter for members of the Government Employees Pension FundIn making investment decisions, the Fund s investment manager, the Public Investment Corporatio n (PIC), is guided by a mandate provided by GEPF that outlines which type of investment can be made, the percentage all ocatio n for each asset class, benchmarks and performance targets, among other guidelines. in place to ensure that the PIC acts within its mandate. GEPF s investment policy and strategy are reviewed and updated regular ly in line with GEPF s Asset Liabil ity Model.

2 This review is carried out in consultatio n with the Minister of Finance in terms of sectio n 6( 7) of the GEP La w and primary role of GEPF is to protect the wealth of our members and pensioners by safeguarding their retirement who are member as well as retirees. GEPF would like to assure its members and pensioners that the rules of the Fund and are not directly dependent on contributio ns by themselves and the employer and GEPF s investments. They should therefore not focus inordinately investments, which is of greater interest to the Board of Trustees and the Minister of invests responsiblyfundtalk | second edition 20162In additio n, GEPF has a Responsible Investment policy as well as a Developmental Investment policy.

3 The Responsible Investment (RI) policy is an overarching strategy aimed at integrating environmental, social and governance issues into investment decisions and ownership practices. The RI policy underpins all GEPF Developmental Investment (DI) policy focuses on targeted investments that contribute to positive economic, social and environmental outcomes for South Afr ica, while earning good returns for members. The DI policy is the foundatio n of GEPF s investments in economic infr astructure, social infr astructure, environmental infr astructure and priority sectors that generate job creatio n. GEPF is required to invest 90% of its ass ets in South Afr ica, and as such remains the single largest investor in the Jo hannesburg Stock Exchange (JSE).

4 It has an internatio nal all ocatio n limit of 5% in the rest of Afr ica and 5% elsewhere The PIC makes investments in all ass et classes guided by the Fund s investment policies and mandates using robust and rigorous investment analysis based on sound investment philosophy, investment process es execu ted by With regard to the investments such as Sanral and Eskom bonds, the PIC has a mandate fr om GEPF to invest in the bonds included in the Bond Exchange of South Afr ica s including a minimum rating of BBB. To the extent that these bonds are included in the ALBI, and they meet the minimum rating criteria, they can be included in GEPF s portfolio. Total exposure to any single bond issuer is subject to restrictio ns stipulated in the investment mandate.

5 For example, not more than 5% of the total bond portfolio can be invested in bonds issued by an A-rated issuer, and not more than 2% can be invested in bonds issued by a BBB-These are some of the limits in place to mitigate the portfolio s credit risk. An additio nal consideratio n is that investments in Sanral and Eskom are investments in the infr astructure on which the South Afr ican economy dependsAll investments that the Fund makes individually only constitute a small percentage of GEPF s total investment portfolio. Although GEPF and PIC do not make any investment expecting to lose money and or not receive a good return, individual investments are therefore not a The Fund s risk management policy and fr amework provides the necess ary processes to ensure the sustainability of the Fund.

6 The mandate and responsibil ity of GEPF s Board of Trustees is contained in the Government Employees Pension (GEP) La w and rules that set out its highlighted by the investment performance of the Fund in the past ten years which shows good standing. The Funds ass ets have grown fr om R416 bil lion to R1 591 bil lion fr om 2005 to 2015. The Fund s ten-year investment performance is evidence that the Board of Trustees, through a good investment strategy with the PIC, is monitoring and directing the Fund s assets in a professional manner. It is also important to note that in any investment environment, certain investments will achieve above expectatio n and others will not reach their targets, but the Fund s overall investment performance over the last few years speaks for itself.

7 While it is the task and responsibil ity of the PIC to focus on each and every investment to ensure a positive outcome, and for the Board of Trustees to monitor this, members and pensioners need not focus too much on them. During the past decade the Board of Trustees has granted resulting in more than 400 000 pensioners buying power being pension increases need to be viewed in the context of the Fund s rules, which state that increases only need to be 75% of the change of the Consumer Price Index. Such the necessary investment goals have been reach ed. liabil ity to its members and pensioners. The assets of the Fund have grown from R416 billion to R1 591 bil lion from 2005 to 2015. fundtalk | second edition 20163 GEPF s Boar d of Trus tees has approved a billion employees and qualifyin g members of t he public.

8 The in vestment aims to provide government employees and qualifyin g members of the public wit h end-us er affordable hous in g projects. It is envisaged tha t thi s in vestment will serve as an opportunit y for the maj orit y of government employees who ar e deemed to be ear ning too much to qualify for an RDP hous e, bu t who ar e ear ning too lit tle to qualify for commercial bank loans to buy hous es, to secur e proper hous in g for t in vestment is part of the developmental in vestment mandate tha t the PIC is car ryin g out on behalf of GEPF. in fras truc tur e element whi ch has hous in g as one of it s key INVESTMENT IN HOUSING SCHEME - A BOOST TO GOVERNMENT EMPLOYEES We believe there ar e man y GEPF members who often do not qualify for bank-issued hous in g loans and hous in g subsidies offered by the government.

9 We ar e, therefore, excit ed about thi s in vestment as it will enable man y government employees to own their own hous es at a much more affordable rate. Most im portan tly , we believe home ownership can restore people s dignit y. provincial government employees, and minimum credit scores apply. In addition, there is an onl in e system thr ough whi ch employees can enr ol. The system can be accessed thr ough the Government Employees Hous in g Scheme (GEHS) websit e: . The system al so all ows employees to see their credit Members can contact SA Home Loans dir ectly on 0860 246 810, visit an y of the SA Home Loans regi onal in formatio | second edition 2016 WHO QUALIFIES FOR AN ORPHAN S PENSION?

10 COMPLETION OF BENEFICIARY NOMINATION FORMSGEPF members ar e enc our aged to update their nominatio n forms in order to as sist GEPF to passes member can list on the nominatio n form. It is up to the member to decide on who can claim hi s or It is therefore im portan t for members to al ways ar e cap tur ed on the nominatio n form. Also, members shoul d ens ur e tha t the nominatio n form is regularly resour ces department and GEPF ar e bound by strict your nominees ar e, so don t be afrai d to complete Children whose parents pass away whi le employed by GEPF pa ys an orphan s monthly pens ion when the member dies and there is no sur vivin g parents (na tur al or adoptive) to tak e car e of t he member s eligible chi ld or chi s is dependent on a number of factors suc h as the deceas ed member s: Actual year s of service; Unexpir ed year s of service, up to the age of 60.