If members dip into the defined-benefit GEPF, taxpayers will have to make up the shortfall
12 August 2021 - 14:32
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There is a lot of noise at the moment over the issue of early access to pensions, and as is quite usual the government has managed to raise expectations among the voting fodder prior to giving thorough consideration and attention to the detail (“No early access to pension savings before 2022”, August 11).
Union federation Cosatu is agitating because members of the Government Employees Pension Fund (GEPF) will be excluded. Yet nobody on the government payroll has had a salary reduction or been forced to work shorter hours due to the Covid-19 pandemic.
Furthermore, the GEPF is a defined-benefit fund, which means taxpayers will have to make up any actuarial deficit that may (or will) come about so the fund can meet all its obligations after too many members have dipped into it.
If Cosatu and others persist in their insistence, perhaps the GEPF should be converted to a defined-contribution fund, in the same manner as most funds in the private sector have done. Then each member would be dipping into their own fund and not the fund as a whole.
John Johnston Via e-mail
JOIN THE DISCUSSION: Send us an e-mail with your comments. Letters of more than 300 words will be edited for length. Send your letter by e-mail to letters@businesslive.co.za. Anonymous correspondence will not be published. Writers should include a daytime telephone number.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
LETTER: Cosatu and public servants’ pensions
If members dip into the defined-benefit GEPF, taxpayers will have to make up the shortfall
There is a lot of noise at the moment over the issue of early access to pensions, and as is quite usual the government has managed to raise expectations among the voting fodder prior to giving thorough consideration and attention to the detail (“No early access to pension savings before 2022”, August 11).
Union federation Cosatu is agitating because members of the Government Employees Pension Fund (GEPF) will be excluded. Yet nobody on the government payroll has had a salary reduction or been forced to work shorter hours due to the Covid-19 pandemic.
Furthermore, the GEPF is a defined-benefit fund, which means taxpayers will have to make up any actuarial deficit that may (or will) come about so the fund can meet all its obligations after too many members have dipped into it.
If Cosatu and others persist in their insistence, perhaps the GEPF should be converted to a defined-contribution fund, in the same manner as most funds in the private sector have done. Then each member would be dipping into their own fund and not the fund as a whole.
John Johnston
Via e-mail
JOIN THE DISCUSSION: Send us an e-mail with your comments. Letters of more than 300 words will be edited for length. Send your letter by e-mail to letters@businesslive.co.za. Anonymous correspondence will not be published. Writers should include a daytime telephone number.
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