Presentation to Parliament

on

GEPF’s key strategic initiatives

GEPF legislative mandate

• The object of the Fund is to provide the pensions and certain

other related benefits as determined by the GEP Law to

members and pensioners and their beneficiaries

• Fund is a juristic entity and not listed under PFMA

• Board of Trustees – Executive Authority

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Responsibilities of the Board

• Effective and efficient administration of the Fund (Section 7)

• Financial Reporting and audit arrangements (Section 9 & 10)

• Funding level of the Fund (Section 17)

• Communication with members & pensioners

• Protect Member Rights

• Investment of all the assets of the Fund according to an investment policy

developed in consultation with the Minister of Finance (Section 6 (7))

• Management of the benefit structure and all related rules (Sections 20 – 24)

• Transitional arrangements and transfers between funds (Section 14)

• Management of financial arrangements: Pension increases, review of

contribution rates, actuarial valuations, etc.

• Dissolution of the Fund (Section 33)

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Our vision is

To be a role model for pension funds worldwide

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Our Mission is to:

• Ensure the timely and efficient delivery of the benefits

provided in the rules, and protect pensions against inflation

to the maximum extent affordable, while maintaining the

financial soundness of the Fund;

• Invest responsibly by engaging with organizations in which we

invest to encourage good governance, social equity and

sound environmental practices;

• Empower our members, pensioners and other stakeholders

through adequate communication; and

• Champion retirement industry initiatives

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Imp

lem

enta

tio

nS

trat

egy

& P

olic

y

How we operate

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Government

Employees

Pension

Fund

Public

Investment

Corporation

Government

Pension

Administration

Agency

Investment Mandate

AdministrationAgreement

7

GEPF strategic objectives

• To remain a leader in Responsible Investing

• Develop capability to be one stop financial services that offers

its members and pensioners improved and flexible benefits

• Optimize the fund structure in terms of governance and

benefits offered to members

• Employer of Choice

• Establish and maintain credibility with stakeholders

www.gepf.co.za

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Remain a leader in Responsible Investing

Continue to align GEPF assets to outperform liabilities

Strategic Objective 1 GEPF Initiatives

� Responsible Investment Implementation Framework

� Developmental Investment Framework

Implementing new unlisted model in line with industry best practice to enhance oversight and monitoring

Engagement with investee companies on ESG issues

Continue to position responsible investing as mainstream in the local as well as international market

Investment strategy overview

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= Portfolio Construction

No discretion

Liability structure

Cashflow

Benchmark

Risk aversion

Asset allocation

Mandate allocation

Manager & product choice

Benchmarks

Investment strategy

Objectives Asset range

Risk Limits

Target final fund / benchmark Current fund

Implementation

Source: Riscura

GEPF Strategic Asset Allocation

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Asset class Lower limit

%

Approved asset

allocation

%

Upper

limit

%

Cash 0% 4% 8%

Domestic bonds 26% 31% 36%

Domestic property 3% 5% 7%

Domestic equity 45% 50% 55%

African (ex SA) equity 0% 5% 5%

Foreign bonds 0% 2% 4%

Foreign equity 1% 3% 5%

Development Investments not limited to

one asset class

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Listed Equity, 45

Unlisted Equity, 3DI Equity, 2Listed Nominal Fixed Interest, 11

Unlisted Nominal Fixed Interest, 2

DI Nominal Fixed Interest, 3

Listed ILB, 13

Unlisted ILB, 2

Listed Property, 2

Direct Property, 3

Listed Africa Equity, 2

Unlisted Africa Equity, 1

DI Africa Investments, 2

Foreign Equity, 3Foreign Bonds, 2 Cash, 4

Our approach to Developmental Investing

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GEPF Development Investment Policy

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Sustainable long-term returns for the GEPF

Infrastructure

Economic

Infrastructure

�Energy

� Logistics Network

�Water

�Commuter Transport

� Liquid Fuels

�Broadband

�Energy

� Logistics Network

�Water

�Commuter Transport

� Liquid Fuels

�Broadband

Infrastructure

Social

Infrastructure Sustainability

Environmental

Sustainability New Enterprise

Job Creation &

New Enterprise

�Affordable Housing

�Healthcare

�Education

�Affordable Housing

�Healthcare

�Education

�Renewable energy

�Green buildings

�Energy Efficiency

�Recycling

�Clean Technology

�Renewable energy

�Green buildings

�Energy Efficiency

�Recycling

�Clean Technology

�SMMEs

�Small cap stock Exchanges

�High Job Creation Section

�BBBEE

�SMMEs

�Small cap stock Exchanges

�High Job Creation Section

�BBBEE

Investments made so far

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Leader in Responsible Investing

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One stop financial services that offers members and pensioners improved benefits

DI policy link established – Social pillar to be more focused on members and pensioners

Strategic Objective 2 GEPF Initiatives

• Assist in setting up a Government Employee Housing Scheme in line with our DI policy

• Determine best practice on introducing flexible benefits to pensioners and members without impacting on the actuarial liability of the fund

• Finalise the consultation process with stakeholders to enable GEPF to implement the Additional Voluntary Fund

• Alignment of benefits offered with PFA, implementation of clean break principle and project to identify gaps between GEP Law and PFA

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Optimize the Fund’s Governance Structure

Strategic Outcome 3 GEPF Initiatives

� Determine good corporate governance i.t.o International best practices with specific focus on composition, processes

Trustee training and development –Trustee leadership

Ensure compliance to the Litigation and Compliance polices

Ensure international best practices in respect of corporate governance

Reviewed Terms of Reference of all Committees and current policies in Governance Charter

King III & PF 130 compliance audit

Review of GEPF reporting requirements – move to integrated reporting

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Working towards a performance driven and valuebased culture

Strategic Objective 4

Enhancement and development of Leadership capability through Life Coaching and Mentoring programmes for Executive and middle management

Skills audit to be carried out to ensure alignment of employee skills fit with organisational requirements.

Employer of Choice

Independent REMCO established in line with industry best practices

GEPF Initiatives

� Define, Acquire and Retain the Best Fit Employee for the GEPF

� Create a working environment as an employer of choice

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Strategic Objective 5

Establish and Maintain Credibility with stakeholders

GEPF Initiatives

Conducted brand health audit

Implement the new Corporate Identity

Increased stakeholder engagement going forward

Repositioning the GEPF as a trusted South African brand is ongoing

Credibility with stakeholders?

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GPAA: Face of the GEPF

• Members and pensioners experience the GEPF brand through

GPAA

• GPAA has a critical role to play in relation to GEPF achieving a

strategic role of being trusted brand among its stakeholders

• Through the agreed SLA and modernisation project, GPAA will

be in position to deliver on its mandate

• Performance in relation to the SLA is already indicating

positive trend

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The GPAA strategic themes aligned to GEPF

goals

• Automate service delivery

• Improve people competence

• Innovate and maintain of systems

• Improve performance against service level agreements

• Stakeholder management that ensures mutual benefit

between GPAA and its stakeholders

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We understand that GPAA is still to present to the Committee, as such they will provide more details on their strategy

Anchors of the GEPF brand

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Clear distinct GEPF brand going forward

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Budget 2012/13

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Economic Classification 2012/13R’000

Compensation of Employees 20 430

Goods and Services 61 269

Investment Management & Actuarial Fees 1 131 626

Administration Fees 613 676

Capital Expenditure 2 635

TOTAL BUDGET 1 829 636

Total Assets under Management 1 000 000 000

Fund expenses as a % assets 0.18%

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THANK YOU

Brooklyn Bridge

Building 3

Steven House

2nd Floor

570 Fehrsen Street

Brooklyn 0075

www.gepf.co.za

Tel: +27 12 424 7300

Fax: +27 12 424 7322

Website: www.gepf.co.za

/ www.gepf.gov.za