The Government Employees Pension Fund (GEPF) has announced a 5.5 percent annual pension increase effective 1 April 2022.
In a statement earlier this week, GEPF spokesperson Matau Molapo said the increase is based on the 5.5 percent inflation rate for the 12 months ending 30 November 2021.
This makes the increase “equal to 100 percent of Consumer Price Index (CPI) and higher than the 75 percent of Consumer Price Index (CPI) provided in terms of GEP Law and Rules.”
GEPF pension increase for 2022
“Pensioners who retired on or before 1 April 2021 are to receive the full increase of 5.5 percent as of 1 April 2022. Pensioners who retired after 1 April 2021 are to receive a proportionate increase based on the number of the months they have been in receipt of pension by 31 March 2022,” Molapo explained.
Besides inflation, GEPF bases its annual increases on affordability (how its financial position will be impacted), investment returns earned over the year and assumptions adopted in the statutory valuations.
“Pensioners will receive individual letters illustrating the new values of their pensions as of 1 April 2022,” Molapo said.
“It must be noted that increases which are above what is provided for in the GEP Law and Rules is granted at the discretion of the Board taking into account the Fund’s investment performance as well as GEP Law requirements.”
Higher than 2021 increase
This year’s increase is higher than the 3.2 percent granted to pensioners in 2021. In November last year, the fund announced that its investment portfolio had grown by 27.5 percent, rising to a market value of R2.09 trillion.
“This positive performance is as a result of a recovery of R451 billion in the Fund’s market value following a decline of 11.4 percent (R260 billion) in the previous financial year where the Fund’s market value was R1.6 trillion,” it said at the time.
“The increase in the investment value is mainly attributable to the recovery in financial markets, particularly equities and bonds, from the market contraction in the first quarter of 2020.”
GEPF is South Africa’s largest pension fund. It caters for most public service employees – with the government being the single-largest employer in the country.
Founded in 1996, it currently has around 1.265 million active members and about 473,312 pensioners and other beneficiaries.