The Government Employees Pension Fund (GEPF) has to date received almost 400 000 applications for savings component withdrawals, amounting to R10.6 billion. The fund has paid out 361 000 of the total claims.
Brian Karidza, the GEPF’s head of actuarial and benefits administration, said yesterday the number of claims received has been below what the fund forecast prior to the implementation of the two-pot retirement system on 1 September.
The average claim was R27 500, which, Karidza said, might seem high relative to the rest of industry, but individuals tend to remain members of the GEPF for longer, and, on average, they have slightly higher salaries.
The GEPF is the largest retirement fund in South Africa and in Africa, with assets of more than R1.61 trillion and 1.267 million active (contributing) members. With 361 000 claims paid to date, 28% of the fund’s members have received a benefit payout from their savings component.
The defined-benefit fund covers state employees, including civil servants, teachers, and police and military personnel.
The average tax paid per claim has been about R8 000, Karidza told a session of the Actuarial Society of South Africa’s 2024 Convention in Cape Town.
About 2 000 members who owed tax to the South African Revenue Service (SARS) and who did not have payment arrangements in place had to pay up to SARS when they made a withdrawal. The average debt was R7 300.
More female (58%) than male members lodged claims for savings component withdrawals.
Most claims have come from members aged between 37 and 45 years. Karidza said he had predicted that members aged slightly younger would claim the most, but the highest claimers have been middle-aged members with a median income of R500 000 to R600 000.
Most claims have come from members with between nine and 16 years of service, and most of the claimants work for the departments of Health and Education and the South African Police Service.
Karidza said that despite communicating to members that they could expect to wait up to 60 days to receive payouts, “we had to fight off members coming to our offices requesting their payment, and it got worse when the private sector started making payments”.
The less than three months in which the GEPF, along with other funds, was expected to prepare its IT and administration systems and educate members “inevitably led to a delay in making payments”.
Karidza said the high volume of savings component claims is presenting the fund with a new challenge: a backlog in processing withdrawals for “normal” member exits on retirement and resignation. This has resulted in complaints from members.
