Publications
Partners
The Government Employees Pension Fund, in a circular dated as far back as 21st October 2013, advised members that any changes in the rules and regulations of the pension fund, has to be approved by the Board of Trustees of the Fund, after due consultation with the Minister of Finance and the Public Service Co-ordinating Bargaining Council (PSCBC).
It furthermore noted that any monies invested on behalf of members would be invested in terms of the Government Employees Pension Law 21 of 1996 as amended, having the interest of the members as its first priority.
During December 2013, African Bank, had a rights issue to raise billions as the Bank found itself in a situation where its liquidity was questionable, and the Pension Fund at the time considering it a wise investment to increase its share holding in the Bank to 12,4% which then exposed the pension fund to an astronomical R 1,28 billion. This making the pension fund the biggest shareholder with the most exposure in the Bank.
In July 2014, the CEO and Founder of African Bank advised that the Bank was yet once again cash strapped and needed another R 8.0 billion in order to sustain and simultaneously announced his resignation from the Bank. These results made the markets plummet and shares in African Bank fell in value from R 40.00 to a mere R 0.30.
This in effect having disastrous effects on the investment by the Pension Fund in African Bank in that its share portfolio decreased from the R 1,28 billion to a mere R 55 million. That in any language extrapolates to a loss of over R 1, 23 billion, which must have hurt the investment and liquidity of the Pension Fund dramatically.
Having had insight into this loss on the investment, the National Treasury on the 09th July 2014, now suddenly issue notice that the Government Employees Pension Fund (GEPF) is considering certain amendments to the payment of benefits to members which would become effective from March 2015.
In any mans’ language this can only be as a consequence of the loss that it sustained in its investment in ABIL, which Treasury fails to admin.
This sparked a conception that the members to the pension fund would be losing their contributions, and civil servants now resign from employment in order to get their contributions paid out to them, before the fund is ‘nationalized’ and they losing everything.
Government and Treasury vehemently denies that this would be the situation but taken the chronological circumstances of events into consideration, it is evident that the fund has suffered financially through this ‘bad investment’ and has to now do something to guarantee and complement is liquid assets, and the only way that this can be achieved is by not paying out benefits to members after March 2015.
Already teachers are resigning in their droves and being what the situation is, the civil servants would in time to come, follow suite and rather cash out on their benefits, in fear of ‘maybe’ losing everything that they have contributed.
