The Government Employees Pension Fund (GEPF) has explained how it determines annual pension increases
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The Government Employees Pension Fund (GEPF) has explained how it determines annual pension increases.
IOL previously reported that the fund confirmed a 3.5% increase for pensioners from April 2026, based on the latest inflation figures. The adjustment is meant to match the rise in the cost of living.
The fund said the increase, which took effect from 1 April 2026, applies in full to pensioners who retired on or before 1 April 2025, while those who retired after that date will receive a pro-rated adjustment based on the number of months they have been receiving a pension.
"Pensioners who retired on or before 1 April 2025 are to receive an increase of 3.5%. Pensioners who retired after 1 April 2025 are to receive a proportionate increase based on the number of months they have been in receipt of pension up to 31 March 2026," the fund said last month.
GEPF said the process starts with inflation, measured by the Consumer Price Index (CPI). For 2026, inflation was 3.5%, and this is used as the main guide for the increase.
"However, the fund said it does not apply CPI automatically. The Board of Trustees also considers whether the fund can afford the increase in the long term. This includes reviewing investment performance and the overall financial position of the fund," the fund said.
The fund added that "the overarching principle is that any pension increase must be underpinned by the Fund's investment returns and is inherently linked to the Fund's affordability".
"When considering an annual increase, the GEPF's Board of Trustees, guided by recommendations from the fund's valuator, assesses a variety of critical factors to ensure that any proposed increase is financially sustainable and will not adversely affect the fund's future stability.
"This assessment includes evaluating the Fund's investment performance, analysing the long-term impact of potential increases on the Fund's financial health, reviewing historical increase patterns, considering current inflation rates, and the potential need for catch-up increases to align pensions with living cost adjustments".
mthobisi.nozulela@iol.co.za
IOL Business