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Govt employee? Your pension fund made huge mistakes, and just wrote off billions

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The Government Employees Pension Fund (GEPF) has written off a R4.3 billion investment it made in the Lancaster Group, Steinhoff's empowerment shareholder.

On 31 March 2017, the GEPF owned about 10% of the entire Steinhoff International Holdings.

The GEPF’s shareholding in Steinhoff represents1% of its total assets.

The GEPF also wrote off a R1 billion loan and investments in preference shares in Iqbal Surve's Sekunjalo Investments and Independent News and Media SA (INMSA).

Other write-offs were a R375 million investment in VBS Mutual Bank and R492 million in Afgri Poultry.

Despite these write-offs, the GEPF's portfolio grew by 8.3% to R1.8 trillion, yielding investment returns of 8.5%.

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The Money Show’s Bruce Whitfield interviewed Abel Sithole, Principal Executive Officer at the GEPF.

Listen to the interview in the audio below (and scroll down for quotes from it).

  • If you are appointed in terms of the Public Service Act, you have to be a member of the GEPF. — Abel Sithole, GEPF

  • The GEPF does not get instructions from anybody else… — Abel Sithole, GEPF

  • …We’re still enjoying the Ramaphoria uplift… — Abel Sithole, GEPF

  • We’re paying more benefits than we’re receiving in contributions… there is a shortfall [R95 billion] financed by investment returns… — Abel Sithole, GEPF

  • We’ve had a significant uptick in resignations… — Abel Sithole, GEPF

  • We’ve never been asked to invest in SAA. We are, however, invested in Eskom… They give you a good return… There’s a guarantee of the capital… — Abel Sithole, GEPF

  • All our investments [90% is local] is impacted by Eskom… A failing Eskom has a devastating impact on the economy… We want to ensure that Eskom continues to provide energy… — Abel Sithole, GEPF

  • Half of the trustees are labour… including people whose job is to protect their own membership… — Abel Sithole, GEPF

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