The State Pension Fund (GEPF) has provided clarifications regarding the methodology for calculating annual pension increases and the factors considered when determining the benefit amount for pensioners.
The Fund reviews increases once a year, and after approval, the increase is added to the monthly pension. Earlier this year, GEPF announced a 3.5% increase for pensioners, which took effect on April 1, 2026.
Pensioners' reaction to this increase has been mixed; some noted that the adjustment is insufficient to compensate for the rising cost of living. This has raised questions about exactly how this increase is calculated and what factors the fund takes into account when making decisions.
How does GEPF determine the annual pension increase?
The Fund states that the decision on the annual increase is made in accordance with the GEP Law of 1996 and its Pension Increase Policy. The GEPF Board of Trustees, consulting with the fund's assessor, considers several elements before deciding on an increase.
These factors include the investment efficiency of the fund itself, the inflation rate, previous pension increases, and the overall financial health of the fund. The Fund stated that the assessment includes analyzing investment returns, studying the long-term impact of potential increases on the fund's financial health, reviewing historical growth models, accounting for current inflation rates, and the potential need for additional increases to align pensions with cost-of-living adjustments.
It is emphasized, however, that the fundamental principle is that any pension increase must be supported by the fund's investment returns and is intrinsically linked to the solvency of the fund itself.
Previously, the publication IOL reported that the fund assured members and pensioners of the safety of their benefits following media reports of the fund's market value dropping by 200 billion rands during the conflict between Israel, the USA, and Iran. This clarification followed a recent interview where GEPF Chairman Frans Baleni stated that the fund's market value had allegedly decreased by 200 billion rands during the first week of the conflict. He noted that these losses demonstrate how global geopolitical events can affect the fund's investments, and that GEPF is reviewing its investment strategy.