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Why it pays to be a member of the GEPF

Dec 14, 2020

Why it pays to be a member of GEPFAs a financial journalist I am increasingly concerned about misinformation provided to members of the Government Employees’ Pension Fund (GEPF) by unscrupulous financial advisers.

A recent example is a reader who was told by an adviser that on retiring after 20 years of service, she would only receive five years’ annuity income in retirement. This is completely untrue.

Some advisers use fear tactics, telling members that their funds will be stolen or mismanaged by the government. Many GEPF members have been convinced by financial advisers to resign before retirement so that they can place their funds in a market-linked pension preservation fund.

What underlies these mistruths is the desire by these unscrupulous advisers to get their hands on members’ significant fund values on which they can earn commission, rather than providing sound financial advice.

What many members do not fully understand is that the GEPF is a “defined benefit” fund. This means the pension received by members has nothing to do with the investment performance of the fund. It relates purely to the number of years of service, your average salary in the last two years multiplied by the accrual rate. The accrual rate is defined under the law that governs the GEPF.

Market performance is irrelevant

Irrespective of the performance of the markets or individual investments within the GEPF, on retirement a member receives a guaranteed pension whether the fund value rose or fell in the years before retirement.

This is different to a “defined contribution” retirement fund or retirement annuity, where the final retirement value depends on market performance.

When the market crashed in 2020 due to COVID-19, members retiring from private funds may have seen a reduction in the value of their pensions of up to 40%. Those already in retirement, who were relying on an income from their living annuities, either had to opt for a lower income or watched their capital reduce significantly, which impacts future income.

Yet members of the GEPF who were retiring in 2020 where unaffected. Their pension is determined by years of service and salary – not market performance. Those GEPF members already in retirement are still receiving their guaranteed income for life.

There are many advantages to belonging to a defined benefit fund, and you need to know what you are losing by switching out.

It is important to note that while private pensions may provide these benefits, they come at an additional cost. If you wish to include life cover, a spousal pension, or funeral cover, a portion of your contribution goes to paying these premiums. With the GEPF, your full employee contribution goes directly to retirement funding, not these additional benefits.

Guaranteed income

In terms of the income in retirement, for a member with more than ten years of service, the GEPF provides a guaranteed income for life with a 50% pension for a spouse, should the main member pass away first. There is no additional cost for providing the spousal pension unless the member wishes to increase it to 75%.

As the GEPF does not have to pay retail prices for annuities, it is able to get better value than if the member had to purchase an annuity with a resignation benefit.

The first five years of the annuity are guaranteed, which means if the member passes away within the first five years, the nominated beneficiaries will receive the balance of the annuity payments up to the end of the five-year period as lump sum.

The GEPF guarantees an annual pension increase each year at 75% of inflation. Historically it has paid an annual increase in line with or slightly higher than inflation. Due to 2020’s market turmoil, next year’s increase may be lower, but it cannot go below the 75% of inflation guaranteed, even if market performance is weak.

Spousal pension

If a member passes away before retirement with ten or more years of service, the spouse would receive a once-off lump sum (death-in-service gratuity) as well as a monthly pension equal to 50% of the annuity the member would have received had the member retired on their date of death. This is a lifelong pension and does not stop if the spouse remarries.

If the member has less than ten years’ service, the value of the pension fund will be paid out to beneficiaries, of which the spouse is entitled to 50%.

If the spouse was a dependant on the medical aid, the spouse is entitled to a medical benefit.

A child is entitled to a child’s pension up to the age of 22, which could be extended if the child is studying or disabled. A child is entitled to a maximum of 25% of the benefit depending on the number of children. If there is a spouse, the remaining 50% would be divided by the number of children. If there is one child, that child would receive 25%. If there are three children, each child receives 16.67%. In the case where there is no spouse, each child receives a maximum of 25% unless there are more than four children.

Members and spouses have a funeral benefit of R15 000, while children have a funeral benefit of R6000.

Leaving a legacy and securing your income

Most parents dream of leaving a legacy for their children and hope they can do this with their retirement fund. The reality is that most of us have insufficient retirement benefits to meet our own income needs for our retirement, considering we are likely to live at least 20 years post-retirement.

If, however, you have enough income from your GEPF pension to meet your needs, then you could consider using the gratuity lump sum, which is also available as part of your retirement package, for your children.

You could invest this amount and if you do not require it for your income needs, you can leave it to your beneficiaries. For example, if you received R500 000 as your gratuity benefit and invested it for 20 years with an average return of 5% above inflation, it would be worth R1.3 million in today’s value.

GEPF in numbers

In the last financial year, ending March 2020, the GEPF paid out the following benefits:


  • 9bn paid in gratuities
  • 2bn in annuity income


  • 2bn resignation benefits paid to 22 678 members


  • R6bn paid in death benefits


  • 8m funeral benefits paid for 21 274 claims

Child’s Pension

  • 9 million paid in orphan’s annuities

This article was sponsored by the GEPF.


  1. GEPF paid ex-husband full pension benefits when resigning without enforcing children maintenance order that was part of the divorce settlement.
    Children were left without maintenance from the father, was it right for GEPF to handle this matter like that? How do i get over it as two of the children are still underage & I still need financial support for them?

    • I know the maintenance orders are challenging for pension funds to administer and we see the same issues in the private sector. You need to use the family courts and if necessary apply for an emolument order on his salary

  2. Excellent

  3. Hi Maya. My mother was under gepf and passed away while married cop with my step-dad. We’ve been waiting for the pension payment for a year and my mom’s husband is now very sick and God forbid might not make it. He has one child with my mother and one child outside marriage. Should he pass away before payout, what will happen to his 50% spouse benefit, will it be dustributed to his biological kids only or all of my mom’s kids excluding the child from outside?

  4. Why are we waiting so long for GEPF to pay out a funeral benefit?

    • It must be noted that the funeral grant is taxable in the hands of the recipient .

    • 1. What happens with my pensions benefits if I don’t have a spouse and children?

      2. Why does it take so long to get the benefits after retirement. In some cases the member ends up having to make loans, in order to keep going, whilst waiting for the pension to pay out.

      • GEPF is built assuming a spouse, if you don’t have one then there is no increased income or anything like that. You can still nominate a beneficiary if you pass away within the first five years of retirement.
        From my discussions with GEPF the issue with late payment has to do with the employer – some departments are very disorganized so they advise members start the paperwork process at least six months before retirement. In the case of some departments you have to nag the HR.

        • Dear Maya – For GEPF, you say that there is no increased income if you do not have a spouse – I have tried without success to query this with them as to the reasons and whether it is not discrminatory ? Also, the choice form requires us to choose between a 50 % or 75 % spousal allowance and there is no option for a single person without a spouse ? Does this mean that a benefit is costed into the formula but not given to single persons ?

          • Correct, this is one of the downsides of a defined benefit fund. However, if you marry whilst in retirement then your spouse/ life partner, even a new one, receives a pension.
            You could do a comparison with guaranteed annuities in the retail industry without a spouse option and see if it makes any difference

  5. Do government employee’s qualify for UIF after retirement?

    • You can only apply for UIF if you are actively seeking work, not after retirement

    • Do GEPF members qualify for UIF refund money when on pension?

  6. Most spouses take advantage of the 50% entitlement in an in-community-of-property divorce. Should I apply and win the variation of a divorce order,woul I receive my money back ,say the spouse had already been paid?

  7. My child’s father passed on but she was only given the lump sum. I would like to know about child pension on who qualifies

  8. My husband pass on around july 2020 I’ve been doing up and downs in and out of GEPF its difficult even to get funeral benefits and those lady from call centre they very rude,without manners there is no direction at all,even with medical aid there is no clear direction….haibooo widow at the same time no one is responsible for your money they can’t even pay me funeral benefits which was meant for funeral arrangement,when I ask about pension benefits GEPF said the file is with the employer, the employer says the file is with GEPF……..5months now no way forward

  9. My daughter was the foster child of my mother who passed away in Aug 2020. Does she qualify for the child pension as my mother was a GEPF pensioner.

  10. I am happy to be informed about my pension.

  11. My grandmother has almost 15years pension. What will happen to her benefits,because I’ve heard that if a GEPF member passed away after 7 years. The beneficiary or dependants will not get anything. How true is that, can you please explain.?

  12. How does the latest SCA Judgment impact on the calculation of a members interest

  13. Is it true that from March 2021. People will be able to withdraw small percentage from our pension

    • Not from the GEPF – that falls under a different Act of government and is not governed by the same rules and private pensions

  14. If a member passes away after retirement what percentage of his pension does the spouse receive

    • As per the article, there is a 50% spousal pension. If the member dies within the first five years there could be an additional lump sum

      • I heard that if spouse not nominated as beneficiary ,will only get monthly salary no lump sum. No automatic 50% entitlement
        How true is that? And also what happened If there are 5 children and 4 are above 22 only one is minor still no nomination

  15. I have taken early retirement at age 56 but I’m not satisfied about my lump sum payment. I’ve worked for 20 years but i got only my contributions. The government didn’t contribute towards my years of service

    • You would need to take this up with your employer – possibly they did not capture years of service correctly

  16. Very insightful information for me GEPF member

  17. May I know how true it is that when you have a child over 18 even if he I’d beneficiary that he won’t get the money should you die

    • Assuming this is before retirement, if a child is nominated as a beneficiary they will get the money even if they are over 18, in a case where they are not nominated but they are financially dependent on the member, then they have to prove how they are financially dependent maybe it’s a student or the child is disabled

      • Hi
        What percentage of my GEPF pension does my disabled dependent get upon my death after retirement.
        If there is no spouse and no other beneficiaries

  18. Hello Maya

    I receive a GEPF pension which is my life-saver. My sister lives in Britain with an elderly husband. They have asked if I may be able to move overseas sometime in the future so that if something should happen to him, at least my sister will have family to support her emotionally. What are the implications for my moving overseas either on (a) a ten year visa (b) receiving British citizenship. Do I lose my South African pension? I am reluctant to take the chance but would love to be there should my sister need be.

    • There are no implications for moving overseas with regards to a members pension but should a member become a British citizen, they need to submit a new bank form ( international bank form) indicating where to pay the pension.

  19. Article very helpful as a government employee. Much appreciated.

    • Good day Maya. I follow your financial advice on TV. I want to know that if my lump sum is less than the sum of my services after 1998(Resignation amount minus sum of service after 1998) WHETHER I would be taxed or receive my lump sum as indicated on my GEPF printout. I am retirering early without penelisation at end December 2020.


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Maya Fisher-French author of Money Questions Answered

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