Government Employee Pension Fund As A Defined Benefit Fund

What does it mean, the Government Employee Pension Fund (GEPF) is a defined benefit fund, as opposed to a defined contribution fund?

GEPF is a defined benefit fund, not a defined contribution fund. This means that benefits are calculated using fixed formulas, based on length of service and final salary, as defined. For example, a member who resigns is entitled to a gratuity or transfer benefit calculated as follows: 7.5% of his or her final salary multiplied by the period of his or her pensionable service, and increased by ten percentage points for each full year of pensionable service between five and 15 years.

Therefore, unlike a defined contribution fund, the benefit eventually payable to a member is not the sum of contributions made by a member, plus growth. There is, accordingly, no ring-fenced amount per member in GEPF. All contributions made to GEPF go into a collective pool from which benefits are paid out according to a formula per member when the member exits.

When GEPF pays the divorce interest on behalf of a member to a former spouse, the amount paid cannot therefore be subtracted from the “member’s money/savings” in GEPF, as no member has any amount of money in GEPF specifically allocated to him or her.

Will the member have to repay the portion of the pension interest allocated by the court and paid to the former spouse?

Yes. It is very important to understand that the member will now owe GEPF the amount paid to the non-member spouse and that this amount will also accrue interest. This is so because GEPF paid, on the member’s behalf, the debt he or she owes to the non-member spouse. Where GEPF pays the portion of the pension interest allocated by the court to the non-member spouse it’s funding is reduced and it loses the growth on the money paid.

It is extremely important that members should try to pay off the debt immediately. Otherwise the member may end up having very little pension money, if any, left over when he or she exits GEPF because the debt has been accruing interest and will be subtracted from any pension benefits payable on exit.

GEPF is a defined benefit fund, not a defined contribution fund. This means that benefits are calculated using fixed formulas, based on length of service and final salary, as defined. Therefore, unlike a defined contribution fund, the benefit eventually payable to a member is not the sum of contributions made by a member plus growth. There is no ring-fenced amount per member in GEPF.

Where a divorce order declares that a portion of a member’s pension interest be paid to the former spouse, GEPF is obliged to pay the said portion awarded to the former spouse. It has no discretion in the matter – by order of court and by law, as passed by Parliament.

Where GEPF is required to pay a portion of the pension interest to the former spouse, it is settling a debt on behalf of the member. This debt must be repaid by the member as GEPF is out of pocket and is losing income on the money paid. The member is not obliged to immediately repay GEPF. He or she may choose not to. Then interest will run on the debt amount and this interest will be deducted, along with the debt, from the eventual pension benefit payable to the member. If the member immediately pays the debt, the member will receive his or her full pension benefit at exit. The member will also have saved on the interest.

If the amount of the divorce debt exceeds the amount of the gratuity (lump sum) and there is an annuity (monthly pension) payable to the member on exit, then the divorce debt must be recovered from the gratuity and annuity and the gratuity and annuity be reduced pro-rata.

Xpression Assist can help ensure that all documents are submitted correctly and timely to ensure that your claim is processed as efficiently as possible.

30 Comments

  1. victor paul maseko

    please assists me since i resign from the department of correctional services 2016/07/31 my service lump sum, was never paid. my persal no is 22307141, victor paul maseko, please assists

    Reply
    • Brenda

      I resigned last year August and submitted my documents to claim my pension money. I haven’t received anything, can you assist?

      My email address is as follows :mbally*****@gmail.com

      Reply
      • Xpression Assist

        Dear Brenda, yes I can assist by following-up at GEPF and give you feedback on the status of the claim. I can then follow the process to ensure your payment is done as quickly as possible. I have sent you an email with further information. Regard, Janene

        Reply
  2. XpressionAssist

    Good morning Victor
    I have sent you and email, I can assist as soon as you respond.
    Kind regards

    Reply
  3. Mathapelo

    Hello,My lawyer sent my decree of divorce to the Gedf a month ago and we still haven’t received a response,I would just like to know on how far they are,please assist

    Thank you

    Reply
    • Xpression Assist

      Good day Mathapelo, by sending a divorce decree to GEPF does not mean they will process the claim but only that the divorce is noted on the system. The GEPF requires specific documents to be submitted in order to process a valid claim. I have send you and email with details on how I can assist. Regards, Janene

      Reply
  4. Majozi

    i am a divorcee, my ex-spouse received a portion of my pensions, as i am checking with the GEPF office i discovered that i am in debt which accumulates interest. please clarify how this is possible since the ex-spouse was paid from my pension. how come i owe with interest while there is still the big difference remaining?

    Reply
    • Xpression Assist

      Dear Majozi, please read the blog post “Government Employee Pension Fund as a defined Benefit fund” where it explains why a debt is created when an ex-spouse claims divorce benefit. Also please note, this is not a GEPF website. Regards

      Reply
  5. Antoinette Snayers

    Hi there! Can you please assist me with a “divorce bank form”? I need to claim from my ex husband pension. All the documents are ready. This form is the only thing that’s hold up. I’ve try to download the form and on the day I’ve submitted the forms the lady from GEPF that visited our district told me that it was not the correct form as she did not have any divorce forms with her. She couldn’t download one because we had loadshedding. She left her number with me but she is not replying to my fonecalls…..

    Reply
    • Xpression Assist

      Dear Antoinette, please note I do not work at the GEPF but offer a service assisting clients with their claims. Please send me a direct email to janene@xpression.co.za and I’ll forward the Choice Form for Divorce benefit claim. Regards

      Reply
  6. Nicholine Simon

    Hi
    Can you please assist.I received a form to complete by choosing 1 of 2 options.
    1. the Debt Approach
    2. the Reduction in Service Approach

    Could you please advise which is the better option

    Reply
    • Xpression Assist

      Dear Nicholine, unfortunately I cannot advise on which choice you should make. I suggest you rather discuss this with your Financial Advisor or directly with GEPF. Regards

      Reply
  7. Phuthuma Jerome Ngwenya

    Hi i retired on the 31march 2020 i called the gepf two weeks back they said my application is in the legal office as i was divorced i did submit all my documents so i just want want to know how long does it take in the legal department and after that where is my application going how long does it take to be finalised

    Reply
    • Xpression Assist

      Dear Phuthuma, I have sent you and email with further information on how I can be of assistance. Regards, Janene

      Reply
  8. Pouline Mushwana

    Hi i submitted my divorce claim on the 8 November 2019 and till now haven’t received the payment my ex spouse already paid in March n he submitted his claim in December 2019. What could be the problem please assist me

    Reply
    • Xpression Assist

      Good day Pouline, I can assist by following-up at GEPF to determine what is causing the delay. I have sent you an email with further information.

      Reply
  9. Mzukisi Sipuka

    Good day I’m Mzukisi Sipuka I have submitted the divorce claim at gepf offices in Capetown in early March 2020 and I even went to their offices early in June 2020 since April 2020 they have been saying that the claim is at payment how many divisions are at payment and why there’s so much delay at that section? I need to finalise this matter please

    Reply
    • Xpression Assist

      Good day Mzukisi, the GEPF is experiencing a huge backlog and some claims are delayed. I can assist by following-up on your claim to ensure it is processed and paid. I have sent you an email with further information. Regards, Janene

      Reply
  10. Pretty

    I submitted my decree of divorce on the 10th of June 2020. I’m not yet recieved any response.

    Reply
    • Xpression Assist

      Good day Pretty, I can follow-up on your pending divorce claim to ensure it is processed and finalized. I have sent you and email with further information on my services. Regards, Janene

      Reply
  11. Mbhele Mxoshene

    I divorced in December 2019.My ex-wife was paid in June and I don’t know why I am not paid my share.

    Reply
    • Xpression Assist

      Good day Mbhele, I can assist by following-up at GEPF to determine what is causing the delay. I have sent you an email with more information on how my services work. Regards, Janene

      Reply
  12. Nthabiseng

    Afternoon
    How long does it take for a divorce 50% claim and how can i know that all my document are correct n that they got all documents

    Reply
    • Xpression Assist

      Dear Nthabiseng, the GEPF has 60 day to finalize a divorce pension claim. I can assist by following-up on the pending claim to determine whether all the correct documents were received and where the claim is in the process. I will then follow-up regularly to ensure it is being processed to ensure prompt payment of your claim. I have sent you an email with further details on my service. Regards, Janene

      Reply
  13. zweli

    Im at Richard bay KZN where i can find your office . i need to do claim

    Reply
    • Xpression Assist

      Hi Zweli, I do not work at the GEPF, I am a private consultant. Please visit the GEPF website to find your nearest Regional Office, https://www.gepf.co.za/contact-us-2/

      Reply
  14. William

    I have put a divorce claim on 27 nth oct 2023 ,it has since been atLegal department and there seems to be no movement on the claim.all the necessary documentation were submitted as per request.

    I was advised to call every seven working days by one of the agents while I went to make a physical follow up.I have been doing as advised since January 2023 to date and all I get is one and same respond from the call centre/agents.The file is still at Legal.

    Please need advice in this regard.

    Reply
    • Xpression Assist

      Good day William, I can assist by following-up at GEPF to determine the cause in the delay as it should not take this long. I have sent you an email with further details on how I can assist you. Regards, Janene

      Reply
  15. Tilly

    Good evening,
    I retired in December 2009 and withdrew a Third of my pension in 2010. To date, since retirement, I have been receiving a monthly pension from GEPF.

    I am undergoing a Divorce and my wife is claiming 50% of my Pension. The question is, is she liable to a 50% claim?
    From my understanding, there cannot be a claim as my retirement was before the Act was amended and had passed the prescribed time.

    Please provide clarity.

    Reply
    • Xpression Assist

      Good day Tilly, if your wife wants to claim from your pension, it must be negotiated privately. The GEPF does not make payment to an ex-spouse once the member is retired and receives a monthly pension (in other words, they do not split the pension 50/50 between the parties).

      Reply

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