gepf inside booklet 1

01 Introduction

02 Who and what is the GEPF?

04 How is the fund managed?

06 Everything you need to knowabout your membership

09 All the details about yourcontributions

10 Overview of your benefits

CONTENTS

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INTRODUCTIONThis booklet is a summary of the main benefits, procedures and processescontained in the Rules of the Fund.The Fund is governed by the GovernmentEmployees Pension Law and Rules and if there is any discrepancy between this booklet and the law and rules, the law and rules will prevail.The rules arecontained as a schedule to the Government Employees Pension Law of 1996,as amended.

The rules, financial statements, newsletters, other publications and forms areavailable on the GEPF website: www.gepf.co.za/www.gepf.gov.za or on requestthrough our call centre number 0800 117 669.

01

INTRODUCTION

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Who and what is the GEPF?Saving money is one of the most important things to do. It is often alsoone of the most difficult things to do. People save to provide for thefuture, especially for their retirement.The Government EmployeesPension Fund (GEPF) makes saving easier. The Fund’s primary aim is toprovide members with retirement benefits. However, it also providesresignation, disability and death benefits.

The GEPF is established in terms of the Government EmployeesPension (GEP) Law, Proclamation 21 of 1996. In terms of the IncomeTax Act, the GEPF is classified as a “Fund established by Law”.

The mandate of the GEPF is:

“To make provision for the payment of pensions andcertain benefits to persons in the employ of Government,certain bodies and institutions and to the dependants ornominees of such persons and to provide for mattersincidental thereto.”

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WHO AND WHAT IS THE GEPF?

The GEPF was established by consolidating the funds of the formerTBVC (Transkei, Bophuthatswana,Venda and Ciskei) states, self-governingstates and various other funds, including the Government ServicePension Fund.

Section 10(2) of the GEP Law requires the Board of Trustees to report on:

• the functions and objectives of the GEPF;

• the extent to which the objectives of the GEPF have been achieved; and

• the efficient and effective application of the resources of the GEPF.

The GEPF Board of Trustees submit the report to the Minister ofFinance.The Board was appointed in June 2005. Up to that stage, theMinister of Finance was the sole interim trustee.

Rule 4.1.1. of the GEP Law states that the Board has to manage theGEPF effectively and efficiently. Rules 4.2.8. and 4.2.9. allow the Board to

cover the costs of managing the GEPF from the Fund, and these rulesempower the Board to take any steps necessary to achieve the GEPF’sobjectives. Although the GEPF is self-funded, it tables an annual report in parliament.

The GEPF is a defined benefit pension fund and the benefits are definedin terms of the rules.The benefits are guaranteed and are not dependenton the investment returns of the Fund or on the level of employercontributions, and the employer generally takes the risk of poorinvestment returns.

A range of other benefit and pension schemes – including militarypensions, special pensions, post-retirement medical assistance, theTemporary Employees Pension Fund and the Associated InstitutionsPension Fund – are also administered by Pensions Administration onbehalf of the Government.

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How is the Fund managed?The Fund is managed by the Board of Trustees.The Board consists of 16 members – eight employer representatives and eight employee representatives (including apensioner-elected member). Each member has an appointed substitute.

The Board members representing employees consist of:

• one pensioner-elected member, whom pensioners elect by postal ballot;

• one person elected by members employed by the SANDF (South African NationalDefence Force), the National Intelligence Agency and the South African SecretService; and

• six representatives elected by the labour representatives in the Public Service Co-ordinating Bargaining Council.

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INVESTMENT INFORMATION

The GEPF has the largest asset portfolio of the Public Investment Corporation (PIC),which acts as its investment portfolio manager. The investments held on behalf of theFund represent 92,3% of the total investments under its administration.

The PIC invests in a range of five asset classes consisting of:

• fixed interest instruments (eg long-term Government bonds);

• equities (shares in listed companies);

• money market (eg short-term interest-earning deposits);

• property (commercial and residential); and

• other investment instruments.

The PIC manages capital, money market and property portfolios internally, while the bulkof its equities portfolio and certain investment classes have been outsourced to externalinvestment portfolio managers, monitored by the PIC.

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Everything you need to know about your membership

Who are members of the GEPF?All Government employees are members of the GEPF, unless they arerequired by law to belong to another pension fund, or are excludedfrom membership of the Fund. Membership to the Fund terminateswhen a person retires, resigns, is discharged or dies.

How to update your detailsIt is very important to let the Fund know of any change in yourpersonal details, such as when you marry, get divorced, have a child,lose a child, move to a new address, close a post box, and so forth.You do this by completing the “personal particulars” form (Z864).

The form is available from the:• departmental personnel offices;• GEPF website (www.gepf.co.za/www.gepf.gov.za);• GEPF offices at 34 Hamilton Street, Arcadia, Pretoria; or• GEPF call centre.

Remember to attach a certified copy of your bar-coded ID or validpassport (certified within the last six months) whenever you updateyour details.

When you register your spouse, attach one of these documents:• A certified copy of the marriage certificate as issued by Home Affairs.• Tenet of religion.• Customary union certificate.• Civil union certificate.

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When you register a life partner, attach the following documents:• an affidavit by you and your partner, setting out the nature of the

relationship with supporting evidence (preferably documentation); or• an affidavit from a member of each party’s family, a mutual friend or

an authorised member of any organisation of which one or both ofyou are a member. This affidavit should set out the nature of yourrelationship with supporting evidence (preferably documentation).

When you register a child, attach a certified copy of the birth certificate.For a major child and other person who is financially dependent on you,attach a certified copy of the person’s identity document or passportand proof of financial dependency, if applicable.

Who are beneficiaries?Beneficiaries are either dependants and/or nominees.

Beneficiaries are any people who can receive a gratuity payment fromyour pension after your death. Beneficiaries can be:• a relative;• a person not related to you;• minor children; or• a registered entity, such as a charity.

IMPORTANT:• Beneficiaries can only receive the gratuity payment, not an annuity.• You may nominate any person or entity to be a beneficiary.• You can allocate the full 100% of the pension benefit.• A will is not a nomination and will therefore not be used.

How do I nominate beneficiaries?You simply complete the WP1002 form and submit it to the GEPF oryour employer.

IMPORTANT:• GEPF must receive the form and date stamp it before your death.• The Board of Trustees can decide whether or not to pay in

accordance with your wish as indicated on the form.

Can I improve my benefit? Yes, you can improve your benefit by purchasing additional service.

You can purchase the following types of service:

Leave without payIf you take leave without pay, you have to contribute to the Fund forthe first 120 days of your leave period.You can, however, buy back anyleave over and above 120 days.

Once your application has been approved, you and your employer willpay the required contributions.

EVERYTHING YOU NEED TO KNOWABOUT YOUR MEMBERSHIP

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How do I purchase leave without pay?• Complete an “Application for Purchase of Service” form (Z215).• Submit the form, along with the following documents, to GEPF:

– A copy of your personnel record card and salary slips before andafter the break in service.

– A copy of the leave form.

Previous service in the GovernmentYou qualify for this option if you:• had worked for Government before;• had contributed to the Fund while working for Government;• had resigned from your employment; and• 18th birthday – meaning if one starts working for Government at a

later stage in their lives they may purchase service dating back totheir 18th birthday.

IMPORTANT:• You may not have been out of Government service for more than

three years.• You have to apply to buy back your previous service within the first

year after your re-employment.

Once your application has been approved, you have to refund the Fundfor the payments you had received before, as well as interest for theperiod it was out of the Fund.

How do I purchase pervious Government service?• Complete an “Application for Purchase of Service” form (Z215).• Submit the form, along with the following documents, to the GEPF:

– A copy of your salary advice that reflects the pension deductionor salary records.

– A copy of the “Withdrawal from Fund Application” form (Z102).

Other service [F (X) formula]You can apply to buy back any other service period not covered in thetwo types mentioned above. However, you cannot have been youngerthan 18 during the service period you want to buy back.

Once your application has been approved, you will have to pay therequired amount to the Fund.

How do I purchase other service?• Complete an “Application for Purchase of Service” form (Z215).

NB:All forms are obtainable from the:1. GEPF website; and2. call centre.

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ALL THE DETAILS ABOUT YOUR CONTRIBUTIONS

All the details about your contributionsHow much is my contribution?You contribute 7,5% of your monthly pensionable salary (also known asemoluments) to the Fund every month.

What is my employer’s contribution?Government, as your employer, also contributes to the Fund everymonth. After the evaluation of the Fund the Government works with anactuary to determine what contribution is needed to ensure the Fundhas enough funds to provide the members with the benefits provided inthe Rules of the Fund.The formula used to calculate the employer’scontribution takes the members’ gender, age and employment with theircontributions and investment returns into account.

Did you know?• Government has made a commitment to ensure that the funding

level of the Fund will be at least 90%.

• As of 1 April 2005, the employer contribution is 13% of non-uniformed employees’ salaries and 16% of uniformed employees’salaries.

ExampleSamuel’s monthly pensionable salary is R3 500. Everymonth Samuel contributes R262,50 (7,5% x R3 500)to the Fund. If the employer contribution is 13%,Government contributes R525 (13% x R3 500).

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Overview of your benefitsWhen does the Fund pay out my benefits?When you resign:• voluntarily;• due to misconduct; and• due to ill-health (occasioned by your own doing).

When you are discharged:• due to ill health (not due to own accord);• due to your post having been abolished;• for presidential or premier appointment;• on early retirement; and• due to ill health because of injury on duty.

When you retire:• normal retirement;• early retirement in terms of service conditions (with permission

from employer);• retirement of own choice, with penalties (right to retire);• retirement of own choice for teachers with vested rights; and• when your contract expires.

How to claim your benefitsTo claim your benefits when you terminate your service, youneed to supply the Human Resources office within yourdepartment with the following documents:1. A certified copy of your bar-coded ID or passport.

(The certification cannot be older than six months.)2. Personal details – form Z864.3. Banking details – form Z894.4. Choice forms depending on your termination reason.5. Copies of a marriage certificate and birth certificates

of all children.6. Any other forms supplied by the Human Resources office

for you to complete.

Your employer will then complete a “Withdrawal from Fund”application – form Z102 – and submit it together with yourforms to the GEPF.

NB: Incomplete forms will delay the process of paying outyour benefits.

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OVERVIEW OF YOUR BENEFITS

When you pass away:• with dependants; or • without dependants.

IMPORTANT:• The Fund can only process documentation and forms that are fully

and originally completed.

Getting the money in the bankYour benefits will be taxed according to the relevant taxlegislation.The after-tax amount will be paid into your bankaccount or post bank account or via the Post Office. It istherefore important to let us have your correct details.You maynot request to have your payment into a third party’s account.

How are my benefits determined?The Fund is a defined benefit pension fund.This means that the benefitsare defined in the Rules of the Fund, and are usually based on:• your final salary;• your years of pensionable service; and • a formula/factor.

What is my final salary?The Rules of the Fund defines final salary as the average salary earnedover the last 24 months of pensionable service. If you were employedfor less than 24 months, the final salary will be the average salary for thewhole period.

ExampleSipho is thinking about retiring. Over the last twoyears, Sipho earned:R70 000 a year for 182 days, R75 000 a year for365 days and R80 000 a year for 183 days.Therefore, Sipho’s final salary used in the formula tocalculate his retirement benefits will be:

Final salary

= (R70 000 x 182 ÷ 365) + (R75 000 x 365 ÷ 365)+ (R80 000 x 183 ÷ 365)

2

= R34 904,11 + R75 000 + R40 109,59

2

= R150 013,70

2

= R75 006,85

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What does years of pensionable service mean?Years of pensionable service is made up of:

• the number of years and fractions of a year that you were employedby the Government and contributed to a pension fund (either GEPFor previous funds) as defined in the rules;

• plus any service that you may have purchased; and

• less any leave without pay period.

If you had contributed to previous funds before 30 April 1996, thatperiod must be multiplied by a factor.The reason for this is that theprevious funds had different levels of contribution and benefits.Toensure fairness between members, the years of pensionable servicehave been adjusted by this factor.

The previous funds and their factors are:

• Transkeian Government Service Pension Fund 1,00

• Transkeian Government Employees Pension Fund 0,90

• Ciskeian Civil Servants Pension Fund 1,00

• Government Pension Fund of Bophuthatswana 1,02

• Government Pension Fund of Venda 1,00

• Government Superannuation Fund of Venda 0,55

• Authorities’ Service Superannuation Fund 0,55

• Authorities’ Service Pension Fund 1,00

• Temporary Employees Pension Fund 0,96

IMPORTANT:Periods of service for which you had already received a paid benefit,cannot be included.

ExampleSipho is thinking about retiring at the end of 2007and would like to calculate his years of pensionableservice. He joined the Temporary Employees Fund on 1 May 1986 and subsequently joined the Fund on 1 May 1996. He has therefore contributed 10 yearsto his previous fund, the Temporary Employees PensionFund, and seven years and 245 days to the Fund.

His years of pensionable service therefore equal:

Years in previous fund + years in Fund

Years in the Fund= 10 x 0,96= 9,600

Years in the Fund= 11 + 245 / 365= 11,6712

Therefore his years of pensionable service = 9,600 +11,6712 = 21,2712

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BENEFITS WHEN YOU RESIGNWhen you resign from Government, or are discharged (due tomisconduct, or an illness or injury that was caused by your own doing),you have two options for the payment of your benefit:

OPTION 1: Cash resignation benefit paid into your account.

The Fund will pay out a lump sum resignation benefit equal to:

7,5% x final salary x years of pensionable service

This benefit will be increased by a percentage according to the following table:

Completed years of pensionable service Percentage

5 or less 0%

6 10%

7 20%

8 30%

9 40%

10 50%

11 60%

12 70%

13 80%

14 90%

15 or more 100%

What you need to do:• Let the HR department know you have resigned.

• Produce a certified bar-coded copy of your latest ID or validpassport.

• Have your employer sign your original once-off irrevocableresignation choice form.

• Complete an original bank form (Z894) in black ink pen (sections A,C and D). Funds can only be paid into your personal account andnot to a third party, or into home loans and credit cards.

• Sort out outstanding debts with your employer. Certain debts maybe deducted from your pension benefit.

• Ensure that any tax issues with SARS have been sorted out.

• Confirm your starting date by submitting documents, such as payslips, to your HR department. (Your employer has this on record.)

• If your surname is different to that on your ID or passport, you needa letter from the Department of Home Affairs to confirm yoursurname, or a marriage certificate.

• If you are divorced, submit the decree of divorce and settlementagreement to the GEPF. If the agreement states that an amount ispayable to your ex-spouse, we also need a bank form and a certifiedcopy of your ex-spouse’s ID.

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OPTION 2:Transfer to an approved retirement fund.When you transfer your benefit to an approved retirement fund, you willreceive no payment in the process. Such a transfer is without deduction oftax and you will be taxed when you exit the approved fund.

In this case, the Fund will transfer your cash resignation benefit (ascalculated in Option 1), plus any difference between this benefit and the actuarial interest.

If the rules of the approved fund into which your benefit is transferred,make provision for a cash withdrawal, it will be limited to one-third ofthe transfer value (interest included).The balance of the transfer value(interest included) will be used to purchase an annuity for yourretirement.

IMPORTANT:You can only transfer your benefit to a preservation pension fund andnot a provident fund.

What you need to do:• Let the HR department know you have resigned.• Produce a certified bar-coded copy of your latest ID or valid

passport.• Have your employer sign an original once-off irrevocable resignation

choice form.• A broker must complete an original Z1525 form. Please note

section D on this form.• The benefit can only be transferred to an approved retirement fund,

such as a retirement annuity or preservation fund.The benefitcannot be transferred to a provident fund.

• If you transfer money to a preservation fund, first settle alloutstanding debts with your employer.

ExampleMax resigned from the Fund after 12 years ofpensionable service at the age of 47. He decided totransfer his withdrawal benefit to an approved retirementfund. At the time, his final salary was R48 000. Max’sresignation benefit was calculated as follows:

7,5% x final salary x years of pensionable service7,5% x R48 000 x 12= R43 200

Since Max has accumulated 12 years of pensionableservice, the above benefit was increased by 70%, ie:R43 200 x 70%= R30 240

Therefore, Max’s total gratuity will be:R43 200 + R30 240= R73 440

However, since Max is transferring his benefit to anapproved retirement fund, the above benefit will befurther increased by the difference (if any) betweenMax’s actuarial interest and the above benefit.

Max’s actuarial interest can be calculated as follows:Years of pensionable service x final salary x F(Z)= 12 x R48 000 x 0,205= R118 080

Therefore, Max’s gratuity, which was transferred to theapproved retirement fund, was R118 080.

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• If your surname is different to that on your ID or passport, you needa letter from the Department of Home Affairs to confirm yoursurname, or a marriage certificate.

• If you are divorced, submit the decree of divorce and settlementagreement. If the agreement states that an amount is payable toyour ex-spouse, we also need a bank form and a certified copy ofyour ex-spouse’s ID.

Example 1John resigned from the GEPF at the age of 53, aftereight years of pensionable service.

John’s final salary at the time was R60 000 and thefactor used to calculate his actuarial interest (as foundin Annexure A) was 0,228. John decided to transfer hisactuarial interest to an approved retirement fund. Hisactuarial interest was calculated as follows:

Years of pensionable service x final salary x F(Z)= 8 x R60 000 x 0,228= R109 440

Example 2Mary retired from the GEPF at the age of 60, afterseven years of pensionable service. Mary’s final salaryat the time was R72 000 and the factor used tocalculate her actuarial interest (as found in AnnexureB) was 11,140.

Mary’s gratuity was calculated as follows:G = 6,72% x final salary x years of pensionable service

= 6,72% x R72 000 x 7= R33 868,80

What is actuarial interest?This is the equivalent sum, which is equal in value toyour benefits from the Fund.The actuarial interest iscalculated according to the following formulae:

Members younger than 55 years:

Years of pensionable service x final salary x F(Z)F(Z) = factor in Annexure A

Members aged 55 years and older:G + [(A x A(X)]G = 6,72% x final salary x years of pensionable serviceA = (1/55 x final salary x years of pensionable

service) + R360A(X) = factor in Annexure B

G and A above are reduced by one-third of apercentage for every completed month prior to anormal retirement date (60th birthday).

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A = (1/55 x final salary x years of pensionableservice) + R360

= (1/55 x R72 000 x 7) + R360= R9 523,64

Gratuity = G + [A x A(X)]= R33 868,80 + R9 523,64 x 11,140= R33 868,80 + R106 093,31= R139 962,11

Example 3Kaya retired from the GEPF at age 58, after nine yearsof pensionable service. Her final salary at the time wasR60 000 and the factor used to calculate her actuarialinterest (as found in Annexure B) was 11,556.

Kaya’s actuarial interest was determined as follows:

G = 6,72% x final salary x years of pensionable service= 6,72% x R60 000 x 9= R36 288

A = (1/55 x final salary x years of pensionableservice) + R360

= (1/55 x R60 000 x 9) + R36= R10 178,18

Since Kaya retired two years (24 months) before hernormal retirement date G and

A should be reduced by:1/3% x 24= 8%

G is reduced by:8% of G= 8% x R36 288= R2 903,04

G = R36 288 - R2 903,04= R33 384,96

Similarly, A is reduced by:8% of A= 8% x R10 178,18= R814,25

A = R10 178,18 – R814,25= R9 363,93

Gratuity = G + [A x A(x)]= R33 384,96 + R9 363,93 x 11,556= R141 594,54

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BENEFITS WHEN YOU RETIRE OR WHEN YOU AREDISCHARGEDWe recommend that you consult a financial advisor at least five to 10 years before you want to retire to ensure that your pension benefitswill be enough to meet your needs.

RetirementWhen can I retire?You may retire from the age of 60, unless your employment contract, orthe law governing your employment, stipulates otherwise.

This also means that you as an employee have attained a prescribed ageand thus qualify to retire from your employment in terms of yourservice conditions.

What are my benefits when I retire with less than 10 years ofpensionable service?• You receive a lump sum cash payment, called a gratuity, which you

can invest.• The gratuity you receive is equal to your actuarial interests,

calculated according to formulae is payable (refer to page 18).

What are my benefits when I retire with 10 or more years ofpensionable service? You will receive a once-off lump sum called a gratuity and an annuity.The annuity is paid in equal monthly instalments.

You can increase your spouse’s annuity entitlement from 50% to 75% byreducing either the gratuity or the annuity.

NB: If you choose to enhance your spouse’s pension, you have toreduce your gratuity or annuity.

Spouses are entitled to your pension up to your death as a pensioner,depending on your choice of your retirement, discharge or severancepackage.

OPTION 1: You decide to keep your spouse’s annuityentitlement at 50%.Gratuity = 6,72% x final salary x years of pensionable serviceAnnuity = (1/55 x final salary x years of pensionable service) + R360

OPTION 2:You decide to increase your spouse’s annuityentitlement to 75% by reducing the gratuity.Gratuity = 5,85% x final salary x years of pensionable serviceAnnuity = (1/55 x final salary x years of pensionable service) + R360

OPTION 3:You decide to increase your spouse’s annuityentitlement to 75% by reducing the annuity.Gratuity = 6,72% x final salary x years of pensionable serviceAnnuity = (1/57 x final salary x years of pensionable service) + R360

How do I change my spouse’s annuity entitlement?Complete the “Spouse Pension Choice” form and submit the form toGEPF.

IMPORTANT:Once you have selected an option, the decision is irrevocable – youcannot change it.• With all the above options a lump sum payment and a regular monthly

payment will be made.The only difference will be the amounts of each.• Years of pensionable service in the above formulae will be increased

by 25% for each year of pensionable service after 10 years formembers of the Intelligence and Secret Service, and uniformedmembers of the Police, SANDF and Correctional Services.

• The gratuity of uniformed members of the SANDF who retireunder the age of 53 years, will be increased by 12%.

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Example 1Siphiwe retired from the GEPF after 22 years ofpensionable service, at the age of 60.At the time, hisfinal salary was R80 000. Siphiwe decided to keep hisspouse’s annuity entitlement at 50%, ie he choseOption 1. On his retirement the Fund paid out thefollowing benefits:

Gratuity = 6,72% x final salary x years ofpensionable service

= 6,72 % x R80 000 x 22= R118 272

Annuity = (1/55 x final salary x years ofpensionable service) + R360

= (1/55 x R80 000 x 22) + R360= R32 360 per year (R2 696,67 per month)

Example 2Miriam was a uniformed member of the SANDF andretired from the GEPF after 18 years of pensionableservice, at the age of 60.At the time, her final salarywas R72 000. She decided to increase her spouse’sannuity entitlement to 75% by reducing her gratuity,ie she chose Option 2.

Since she was a uniformed member of SANDF, heryears of pensionable service was increased by:

25% for each year of completed service after 10 years= 25% x 8 years= 2 years

Total years of pensionable service18 years + 2 years= 20 years

Miriam received a gratuity (cash lump sum) equal to:


= 5,85% x R72 000 x 20= R84 240

Since Miriam retired after age 53, her gratuity was notincreased by 12%. In addition, Miriam received anannuity every year, equal to:


= (1/55 x R72 000 x 20) + R360= R26 541,82 per year (R2 211,82

per month)

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Early retirementWhen can I go on early retirement?You may retire at any date before your 60th birthday:• With your employer’s consent, you may retire early from the Fund

as determined by your conditions of service.

• If your service conditions allow you to retire between the ages of 55 and 60.

• If your contract expires.

What are my benefits when I retire early with less than 10 years of pensionable service?You will receive a gratuity equal to your actuarial interest in the Fund.

What are my benefits when I retire early, between the ages of 55 and 60?The annuity and gratuity will be calculated according to the sameformulae as for normal retirement.They will, however, be reduced by0,3333% for each month between your date of retirement and the ageof 60.

How do I apply for early retirement?This depends on your conditions of service and on the early retirementreason, and this should be an agreement between you and youremployer.

Early retirement process• Z102 should be filled in.• Z894 should be filled in.• Letter of approval for early retirement signed by HOD.• Certified ID copy.• Choice form for retirement.• Proof of termination-persal printouts.• (if more than 10 years of service) Z583 provided at retirement

he/she was a member of a medical aid.

All the above documents need to be submitted by employer. Incompleteforms will delay the process.

Example 3Paulos retired from the GEPF after 30 years ofpensionable service, at the age of 60.At the time, hisfinal salary was R75 000. Paulos decided to increasehis spouse’s annuity entitlement to 75% by reducinghis annuity, ie he chose Option 3. On his retirement,the Fund paid the following benefits:


= 6,72% x R75 000 x 30= R151 200

Annuity = (1/57 x final salary x years ofpensionable service + R360)

= (1/57 x R75 000 x 30) + R360= R39 833,68 per year (R3 319,47

per month)

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Example 1Simon decided to take early retirement at age 56, after16 years of pensionable service. His normal retirementage is 60. Simon also chose Option 1, ie to keep hisspouse’s annuity entitlement at 50%.At the time of hisretirement, Simon’s final salary was R78 000.

His normal retirement gratuity would have been asfollows:


= 6,72% x R78 000 x 16= R83 865,60

However, since Simon retired four years (48 months)early, his gratuity was reduced by:1/3% x 48 months= 16%

Therefore, the total reduction amounted to:16% x R83 865,60= R13 418,50

Simon’s final gratuity was:R83 865,60 - R13 418,50= R70 447,10

His normal retirement annuity would have been:

Annuity = (1/55 x final average salary x years ofpensionable service) + R360

= (1/55 x R78 000 x 16) + R360= R23 050,91

Similarly, Simon’s annuity was reduced by:16% x R23 050,91= R3 688,15

Therefore, Simon’s final annuity was equal to:R23 050,91 - R3 688,15= R19 362,76 per year (R1 613,56 per month)

DischargesWhen can I be discharged?You may be discharged from the Fund for the following reasons:

• Medical reasons.

• When jobs are abolished, reduced, reorganised or restructured.

• To promote the efficiency of the department.

• When you are appointed to another position by the President or a premier.

• When you are injured on duty.

• Incapability (excluding medical reasons) and not as a result ofmisconduct.

NB: The discharge process is subject to approval by your Human Resourcesdepartment.

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What are my benefits when I am discharged with less than 10 yearsof pensionable service?You will receive a gratuity according to the following formula:

15,5% x final salary x years of pensionable service x 4/3

Should you be discharged from service due to incapability to performyour duties, your gratuity will be:

15,5% x final salary x years of pensionable service

Discharge process (Ill health)• Z102 should be filled in.

• Z894 should be filled in.

• Letter of approval for discharge signed by HOD.

• Medical report.

• Z583 if you have more than 10 years of service, provided on lastday of service you were a member of a medical aid.

• Certified bar-coded ID copy.

• Choice form for retirement.

What are my benefits when I am discharged with 10 or more years ofpensionable service?You will receive a gratuity and an annuity.

You can increase your spouse’s annuity entitlement from 50% to 75% byreducing either the gratuity or the annuity. You can do this in one ofthree ways.

OPTION 1:The member decides (after 1 December 2002)to keep the spouse’s annuity entitlement at 50%.Gratuity = 6,72% x final salary x increased years of pensionable serviceAnnuity = (1/55 x final salary x increased years of pensionable service)

+ R360

OPTION 2:The member decides (after 1 December 2002)to increase the spouse’s annuity entitlement at 75% byreducing gratuity.Gratuity = 5,85% x final salary x increased years of pensionable serviceAnnuity = (1/55 x final salary x increased years of pensionable service)

+ R360

Example 1Sarah was discharged from the service of theGovernment due to medical reasons after five years ofservice, and with a final salary of R48 000. Sarah retiredand received a gratuity that was calculated as follows:

15,5% x final salary x years of pensionable service x 4/3= 15,5% x R48 000 x 5 x 4/3= R49 600

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OPTION 3:The member decides (after 1 December 2002)to increase the spouse’s annuity entitlement to 75% byreducing the annuity.Gratuity = 6,72% x final salary x increased years of pensionable serviceAnnuity = (1/57 x final salary x increased years of pensionable service)

+ R360

How do I change my spouse’s annuity entitlement?Complete the “Spouse Pension Choice” form and submit to GEPF.

IMPORTANT:• Once you have selected an option, the decision is irrevocable.

• With all three options, a lump sum payment and a regular monthlypayment will be made.The only difference will be the amounts ofeach.

• Years of pensionable service in the above formulae will be increasedby 25% for each year of completed service after 10 years formembers of the Intelligence and Secret Service, and uniformedmembers of the Police, SANDF and Correctional Services.

• The gratuity of uniformed members of the SANDF who retireunder the age of 53 years, will be increased by 12%.

• All members, except those discharged because they are incapable offulfilling their duties, will have their pensionable service increased bythe lesser of:– five years;– one-third of their pensionable service; or– unexpired period of service.

Example 1Themba retired from the GEPF after 12 years ofpensionable service at the age of 51 due to medicalreasons. His final salary was R72 000. He opted tokeep his spouse’s annuity entitlement at 50%,ie Option 1.

His years of pensionable service will be increased bythe lesser of:• five years;• one-third of his service (which equals four years

– 12 x 1/3); or• his unexpired period of service of nine years

(60 – 51).

His years of pensionable service are thus increased byfour.Therefore his adjusted total years of pensionableservice are 16 years (12 + 4).Themba’s retirementbenefits are:


= 6,72% x R72 000 x 16= R77 414,40


= (1/55 x R72 000 x 16) + R360= R21 305,45 per year (R1 775,45

per month)

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BENEFITS IN THE CASE OF DEATH BEFORE RETIREMENTThe Fund provides your family and/or beneficiaries with certain benefitsin the event of your death.

Death in service gratuity (lump sum payment)

Don’t forget!• Nominate a beneficiary.• Keep the Nomination of Beneficiaries form (WP1002)

up to date.• Submit certified copies of IDs and/or birth certificates

of your nominees, with the updated form, to GEPF.

What happens when I die with less than 10 years of pensionableservice?Your beneficiaries or your estate (if you have no beneficiaries) willreceive a gratuity.The amount of the gratuity will be the greater of:

• the actuarial interest; or

• your final salary.

The actuarial interest is calculated according to formulae described onpage 24.

What happens when I die with 10 or more years of pensionableservice?Your beneficiaries or estate (if you have no beneficiaries) will receive agratuity calculated as follows:

Gratuity = 6,72% x final salary x increased years of pensionable service+ 5/55 x final salary x increased years of pensionable service

The years of pensionable service in the formula will be increased asfollows:

• Members of the Intelligence and Secret Service, and uniformedmembers of the Police, SANDF and Correctional Services, willreceive an additional 25% for each year of completed service after10 years.

• The years of pensionable service will also be increased by the lesser of:– five years;– one-third of the pensionable service; or– unexpired period of service.

How do my beneficiaries access the gratuity?• If a nomination form (wp1002) was completed and the child is a

minor, then the following need to be submitted:(a) A certified copy of a birth certificate.(b) A guardian letter.(c) A certified copy of a guardian ID.

• For majors (18+) (a) Z894.(b) Certified ID copy.

• If a nomination form was not completed or does not comply with therequirements and a gratuity is payable to multiple beneficiaries, the Fundmay divide and award the gratuity amongst the beneficiaries.

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Example 1Anna died at the age of 54 while still a member ofthe Fund.At the time of her death she had completed21 years of pensionable service. Her final salary wasR67 000.Anna’s spouse received a gratuity, which wascalculated as follows:

Anna’s years of pensionable service is increased by thelesser of:• five years;• one-third of her service, which equals seven years

(21/3); or• her unexpired period of service of six years

(60 – 54).

Her years of pensionable service were adjusted by fiveyears, bringing the total to 26 (21 + 5).

Gratuity = 6,72% x final salary x increased years ofpensionable service + 5/55 x final salaryx increased years of pensionable service

= 6,72% x R67 000 x 26 + 5/55 x R67 000 x 26

= R117 062,40 + R158 363,64= R275 426,04

Spouse’s annuityWho may receive a spouse’s annuity?Your spouse or life partner (if approved as a life partner by the Fund)qualifies for a spouse’s annuity. It is not payable to other beneficiariesthat might have been nominated on the nomination of beneficiariesform.

IMPORTANT:• Where more than one spouse is left behind, the spouses’ pension

will be divided equally among legitimate spouses.

• Should spouses and orphans be beneficiaries, the Fund will also treatthe deceased parent of the orphans as a spouse for the purpose ofapportioning the spouse’s pension.

When does my spouse qualify for an annuity?• when you die in service; and

• when the sum of your years of pensionable service and unexpiredperiod of service is at least 10 years.

The sum of the years of pensionable service plus the unexpired serviceperiod is for the purpose of this explanation called the full potentialservice.

How much will my spouse receive?The spouse’s annuity is half of the annuity that you would have receivedhad you retired on the date of death.This annuity is based on the fullpotential service.

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The calculation is as follows:

50% x [(1/55 x final salary x full potential service) + R360]

How does my spouse access the annuity?• Your spouse has to complete the “Application for Spouse Pension”

form (Z143).The form is available on the GEPF website(www.gepf.co.za/www.gepf.gov.za) or from the GEPF offices at 34 Hamilton Street, Arcadia, Pretoria.

Along with the completed form, GEPF will need the followingdocuments:• Certified copy of the applicant’s identity document (certified within

the last six months).• Certified copy of the deceased member or pensioner’s death

certificate.• Certified copy of the deceased member’s identity document/

passport with confirmation of death by Department of HomeAffairs.

• Original Z143 form (request your employer to provide you with acopy).

• A certified copy of the marriage certificate (religious, customaryunion or civil) as issued by Home Affairs. Alternatively, proof ofmarriage by means of a certified copy of a customary unioncertificate, Hindu certificate or “Lobola” affidavit and confirmation ofcustomary union by representatives from both families.

• Copy of the death certificate.

Orphan’s annuityWho qualifies for an orphan’s annuity?An eligible child who was orphaned as a result of the death of:• a member;• the spouse of a deceased member;• a pensioner who retired on or after 1 December 2002; or

Example 1From the previous example, Anna had more than 10 years of full potential service.Therefore herhusband, apart from the gratuity, will also receive aspouse’s annuity for the remainder of his life.

Spouse’s annuity = 50% x [(1/55 x final salary x full potential service) + R360

Anna died at the age of 54 so her prospective servicewas six years (60 x 54).

Therefore her full potential service was:= actual service years + unexpired period of service= 21 + 6= 27 years

Spouse’s annuity = 50% x (1/55 x R67 000 x 27+ R360)

= 50% x R33 250,91= R16 625,45 per year

(R1 385,45 per month)

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• the spouse of a pensioner who retired on or after 1 December2002.

An eligible child who is either the natural or legally adopted child of amember or pensioner or a deceased member or pensioner who iseither :

• under the age of 18;

• under the age of 22 and a full-time student; or

• a child over the age of 18 and disabled and factually dependent.

What is the old orphan’s annuity?The old orphan’s annuity, as explained below, applies to the children ofpensioners who died between 1 December 2002 and 30 March 2006.

The Fund pays an orphan’s pension when you, as the member, passaway and there is no surviving natural or adoptive parent to take careof your child or children.

The amount of the annuities will depend on the number of eligibleorphans that are left behind.

Death of Death ofNumber Death of spouse of spouse of Death of

of orphans a member member pensioner pensioner

Calculated on pension Pensioner’s pension,

amount of: Spouse pension with increases

1 40% 40% 20% 20%2 60% 60% 30% 30%

3 and more 80% 80% 40% 40%

Therefore, the orphan’s annuities will be the following:Orphan: % (as mentioned in above table) 50% [(1/55 final average

salary full potential service) + R360]

IMPORTANT:• The amounts will always be divided equally between the orphans.

• The orphan’s annuities will be adjusted as and when one or more of the orphans are not eligible any more under the rules of the Fund.

• Other provisions may apply to the orphan’s annuities if there ismore than one spouse.

How does an orphan access the annuity?GEPF needs the following documentation to process an orphan’sapplication:

• Appointment letter of the guardian or caregiver of the minororphans.

• Proof of full-time studentship from the tertiary institution, for eachyear from date orphaned to date of application.

• Birth certificates of all orphans, as well as a copy of the bar-codedID documents if the orphans are over the age of 16.

What is the new orphan’s annuity?The new orphan’s annuity applies to children who were orphaned asfrom 31 March 2006.The annuity will be 10% of the member’s annuityat the date of termination, with increases.The children will not receiveless than R200 per month each.

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DEATH AFTER RETIREMENTWhat happens when I die within five years of retirement ordischarge?Your full annuity is guaranteed for five years after retirement.Therefore,should you die within this five-year period, your beneficiaries or estate(if there is no beneficiary) will receive the balance of the annuitypayments up to the end of the five-year period as a cash lump sum.

However, the R360 supplement (that is added to the annuity everyyear) will be excluded.

Example 1Mary died at the age of 50 while still a member ofthe Fund.At the time of her death, she had completed15 years of pensionable service with the Fund. Herfinal average salary was R50 000. Mary had nospouse at the time of her death, but she left threechildren behind.The orphan’s annuities for Mary’schildren are calculated as follows:

Mary’s full potential service is calculated as follows:• Past service of 15 years.• Her prospective service was 10 years (60 – 50).• Full potential service of 25 years (15 + 10).

Mary had more than 10 years of full potential service.Therefore, her orphans will receive an orphans’ annuitywhile they are eligible.

Orphan’s annuity = 80% x 50% x (1/55 x finalaverage salary x full potentialservice + R360)

Orphan’s annuity = 80% x 50% x (1/55 x R50 000 x 25 + R360)

= 40% x (R23 087, 27)= R9 234,91 per year

(R769,58 per month)

Example 2Suppose now that after five years the eldest child,Tom,loses his eligible orphan status. At this stage the totalorphan’s annuity is R13 280 per year.The orphan’sannuity has to be adjusted as there are now only twoeligible orphans.The adjusted orphan’s annuity iscalculated as follows:

New orphan’s annuity = 60% / 80% x oldorphan’s annuity

= 60% / 80% x R13 280 = R9 960 per year

(R830 per month)

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Your spouse will also receive an annuity (from the first month after yourdeath) equal to either 50% or 75% of the annuity you received beforeyour death.The percentage will depend on the option you chose whenyou retired. Remember this option is only available to members whoretired after 1 December 2002 and who are entitled to an annuity.

Don’t forget!• Nominate a beneficiary.• Keep the Nomination of Beneficiaries form (WP1002)

up to date.

What happens when I die five or more years after myretirement?The Fund will provide your spouse with an annuity of either 50% or75% of the annuity you received before your death.The percentage willdepend on the option you chose when you retired. Remember thisoption is only available to members who retired from 1 December2002 and who are entitled to an annuity.

IMPORTANT:• Your spouse will receive this annuity until he or she dies, regardless

of whether or not he or she remarries.

How does my spouse access the annuity after my death?• Your spouse has to complete the “Application for Spouse Pension”

form (Z143).The form is available on the GEPF website(www.gepf.co.za/www.gepf.gov.za) or from the GEPF offices at 34 Hamilton Street, Arcadia, Pretoria.

• Along with the completed form, GEPF will need the followingdocuments:– Certified copy of the applicant’s identity document (certified

within the last six months).

Example 1Jack retired from the GEPF and received an annuity ofR36 000 (R3 000 per month). Jack decided on Option 1, ie keeping his spouse’s annuity entitlement at50%. (The options available to Jack are described in thesection on benefits on retirement.) Jack died three yearsafter his retirement.At the time of his death, he wasreceiving an annuity of R45 000 (R3 750 per month).

The Fund paid out the following benefits:

Balance of annuity paymentsJack’s annuity is guaranteed for two more years,excluding the R360 supplementary amount.Thereforehis beneficiaries received a lump sum payment of:(R45 000 x R360) x 2= R89 280

Plus spouse’s annuityJack’s spouse will receive a monthly income of 50% ofthe annuity that was payable to Jack before his death(as Jack chose Option 1 on retirement):R45 000 ÷ 2= R22 500 per year (R1 875 per month)

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– Certified copy of the deceased member’s or pensioner’s deathcertificate.

– Certified copy of the deceased member’s identity document/passport with confirmation of death by the Department ofHome Affairs.

– Original Z143 form.– A certified copy of the marriage certificate (religious, customary

union or civil) as issued by Home Affairs. Alternatively, proof ofmarriage by means of a certified copy of a customary unioncertificate, Hindu certificate or “lobola” affidavit.

– Copy of the death certificate.

FUNERAL BENEFITSWith effect from 1 December 2002, the Fund provides the followingfuneral benefits.

A cash lump sum of R7 500 for the funeral of:• a member;• a pensioner;• the spouse of a member (or a deceased member); and• the spouse of a pensioner (or a deceased member).

A cash lump sum of R3 000 for the funeral of:• a child of a member (or a deceased member); and• a child of a pensioner (or a deceased pensioner).

IMPORTANT:• The benefits are payable irrespective of the order in which the

deaths occur.• The funeral benefits for the spouse and eligible children will be paid

even after the death of the member/pensioner.

How do I, or my family, access the funeral benefit?• Complete original Z300 and Z894 forms.

• Post or hand-deliver these forms to GEPF if payments must bemade via ACB. Fax or e-mail the documents if payment must bemade to the Post Office.

• Include the following attachments:– Certified copy of identity document or valid SA passport of both

deceased member and applicant.– Original certified copy of death certificate.– Proof of marriage.– For deceased minor or major children, proof of age in the form of

an original certified copy of their birth certificate or identitydocument.

– If the major deceased child was disabled, medical proof ofdisability.

– If the major deceased child was a student, proof of studentregistration.

– If the major child is claiming the funeral benefit, proof ofrelationship is required.

– If an estate is applicable, a certified copy of executorship isneeded.

– When payment is made via the Post Office, faxed or e-mailedcopies of the original documents must be submitted to the PostOffice.

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Who is an eligible child?This is the natural or legally adopted child of a (living ordeceased) member or pensioner, who is:• under the age of 18;• under the age of 22 and a full-time student;• a child over the age of 18 and disabled and factually

dependent; or• a stillborn child.

ANNUITY INCREASESThe Fund usually increases annuities on 1 April every year.The increaseis usually 75% of the average increase in the consumer price index (all items) for 1 December to 30 November of the previous year.The Fund’s actuary has to make sure that the Fund can afford theincrease before it is granted.

You will receive an additional increase if your annuity is less than theminimum level.The minimum level is 75% of your pension at retirement,increased by full inflation as measured by the consumer price index (allitems) from the date of retirement up to the specific increase date.

If you retire during a year when an annuity increase is granted, you willreceive a pro rata increase.

ADDITIONAL BENEFITSThe Fund also pays benefits for injury on duty and severance packages.Details of these benefits have not been included in this booklet but arecontained in the Rules of the Fund.

Any additional financial liabilities arising from these benefits, or fromyour retirement or discharge, will be covered by the Governmentand/or your employer.

DEFINITIONSThe definitions below have been created for ease of reference, however,the definitions which are stipulated in the GEP Law will prevail.

GEPFGovernment Employees Pension Fund.

BeneficiaryThe person or persons who could be entitled to a gratuity as a resultof the death of the member.

AnnuityThis is the annual income that may be received from the Fund afterretirement or discharge.The annuity will be paid in equal monthlyinstalments on or before the last or first day of each month.

Example 1John and his son Mark both died in the same motorvehicle accident while John was still a member of theFund.A cash lump sum payment of R10 500 will bepaid to their beneficiaries.This amount consists of R7 500 for John’s funeral benefit and R3 000 for Mark’s.

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GratuityA lump sum payable when service is terminated.

Adjusted pensionable service (increased years of pensionableservice)This is the period of pensionable service, taking into account alladjustments made thereto in terms of the Rules, as at the date oftermination of service.

Approved retirement fundA fund other than a related fund, which has been registered in terms ofthe Pension Funds Act, 1956 (Act 24 of 1956). It has been approved asa pension fund, retirement annuity fund or provident fund in terms ofthe Income Tax Act, 1962 (Act 58 of 1962).

Defined contribution pension fundA defined contribution pension fund is a fund where the benefits aremainly based on the sum of contributions plus investment returns.Benefits are dependent on the level of member and employercontributions as well as on the level of investment return.The membergenerally bears the risk of poor investment returns.

Defined benefit pension fundA defined benefit pension fund is a fund where the benefits are definedin terms of the rules. Benefits are generally guaranteed and are notdependent on the investment returns of the fund or on the level ofemployer contributions. In such funds the employer generally takes arisk of poor investment returns.The Government Employees PensionFund is a defined benefit fund.

Final salaryMost of the formulae for calculating benefits under the GovernmentEmployees Pension Fund involve the concept of final salary. Final salary isthe average salary earned over the last 24 months of pensionableservice, or during the whole period of such service, whichever period isshorter.This does not include allowances paid unless they are specifiedas pensionable allowances.

Full potential serviceThis is the sum of years of pensionable service and the unexpiredperiod of service.

Actuarial interest and factorThe actuarial interest is a set formula in the Rules. It is determined bythe actuary and approved by the Board.

This is the equivalent sum, which is equal in value to your benefits fromthe Fund. It is calculated by means of various formulae according toyour age.

The actuarial interest that become payable could be paid into youraccount or approved fund as determined by the Rules.

Funding levelThis is the ratio of the value of the assets to the value of the liabilities.The actuary to the Fund determines both these values.

Pension retirement dateThis is the date on which the member becomes eligible for pension asdetermined by the law governing employment. If this date is notspecified, it will be the date on which the member reaches the age of 60.

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Pensionable salaryThis is the basic annual salary plus any other allowances that may berecognised as pensionable (also known as pensionable emoluments).

Pensionable serviceThis is the number of years (and fractions of a year) that the memberhas been employed by the Government and contributed to a previousfund and the GEPF, plus service that may have been purchased, lessleave without pay periods. If a year has not been completed, the daysare divided by 365 days, which will provide the fraction.

The period of service that the member has contributed prior to 30 April 1996 to previous funds must be multiplied by a factor.Thesefactors are shown on page 12.

The FundThis refers to the Government Employees Pension Fund, unlessotherwise specified.

Unexpired period of serviceThis is the number of years between the member’s age when he/sheterminates service, and the age of 60.

Disabled childIn relation to the definition of an “eligible child” this means anypermanent physical or mental impairment that, in the opinion of theBoard, renders the person unable or unfit to provide for his or her ownmaintenance.

SpouseThis is the person the member is legally married to or who isrecognised as the member’s spouse (according to indigenous law or

custom or the tenets of any religion) or the member’s recognised lifepartner (including a same sex life partner).

Adopted childThis is a child who is legally adopted in terms of the Child Care Act,No 70 of 1983, as amended.The adoption order is vested in themember or pensioner or the deceased member or pensioner.

Eligible childThis is the natural or legally adopted child of a (living or deceased)member or pensioner:

• under the age of 18;

• under the age of 22 and a full-time student;

• over the age of 18 and disabled and factually dependent; or

• a stillborn child.

Eligible orphanThis is a child of whom both parents (natural or adopted) are deceased.This is a child who was orphaned as the result of the death of:

• a member;

• the spouse of a deceased member;

• a pensioner who retired on or after 1 December 2002; or

• the spouse of a pensioner who retired on or after 1 December 2002.

StillbornAs defined by the Births and Deaths Registration Act No 51 of 1992,this is the natural child of a member or pensioner, who is:

• born after 26 weeks of pregnancy; and

• shows no sign of life.

Any termination of pregnancy that is self-inflicted as per the Choice onTermination of Pregnancy Act, No 92 of 1996, is specifically excluded.

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Service periodsPlease confirm with your department whether your service date iscorrect, for it is of utmost importance when you terminate your service.If your service date is not correct, request your department to forwarda Z125 (Admission to Fund form) including the necessary proof ofcontribution to the GEPF as soon as possible.This information will beverified and the necessary changes will be made.

ANNEXURE A:F(Z) FACTORS – SUMMARISED VERSION

Years F(Z) Years F(Z) Years A(X)

19 0.090 37 0.159 55 12.13520 0.092 38 0.163 56 11.94821 0.094 39 0.167 57 11.75522 0.096 40 0.171 58 11.55623 0.098 41 0.176 59 11.35124 0.101 42 0.181 60 11.14025 0.103 43 0.186 61 10.92326 0.107 44 0.190 62 10.70227 0.112 45 0.195 63 10.47528 0.116 46 0.201 64 10.24329 0.120 47 0.205 65 10.00730 0.124 48 0.210 66 9.76831 0.129 49 0.214 67 9.52632 0.134 50 0.218 68 9.28033 0.139 51 0.221 69 9.03334 0.145 52 0.225 70 8.78435 0.149 53 0.228 71 8.53436 0.153 54 0.231 72 8.285

73 8.03674 7.79075 7.547

Use age as on previous birthday.

DISCLAIMERThe information provided in this document is protected by applicable intellectual propertylaws and cannot be copied, distributed or modified for commercial purposes.

While every effort has been made to ensure that the information contained herein iscurrent, fair and accurate, this cannot be guaranteed.The use of this information by any thirdparty shall be entirely at the third party’s discretion and is of a factual nature only.Theinformation contained herein does not constitute financial advice as contemplated in termsof the Financial Advisory and Intermediary Service Act, 2002.The GEPF does not expresslyor by implication represent, recommend or propose that products or services referred toherein are appropriate to the particular needs of any third party.

The GEPF does not accept any liability due to any loss, damages, costs and expenses, whichmay be sustained or incurred directly or indirectly as a result of any error or omissioncontained herein.

G R A P H I C O R 3 9 2 8 2

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