GEPF solvency cracks nod

Magda Wierzycka got it wrong in her last column (PIC has an obligation to SA’s taxpayers to act responsibly, June 6). The Public Investment Corporation (PIC) and the Government Employees Pension Fund (GEPF) are not unique. All defined benefit pension funds globally face the same predicament and can end up having to go cap in hand to their financial sponsor. In the case of the GEPF it will be the government.

However, the solvency of the GEPF is periodically measured by actuarial experts and it is this measure that is relevant in determining the risk to the government and hence the taxpayer.

In the case of the GEPF this solvency measure stands at 116%, implying that the GEPF’s assets, most of which are managed by the PIC, significantly exceed its obligations.

In other words, the GEPF has R1.16 for every R1 it owes its retiring members.

J Sithole Century City