South Africa’s biggest public sector retirement fund is sounding the alarm over the impact of geopolitical risk on pension savings, with the Government Employees Pension Fund (GEPF) saying the war in Iran exposed how quickly global shocks can wipe value off long-term investments. Speaking publicly this week, Frans Baleni, chair of the GEPF, said the conflict in the Middle East hit the fund hard and is now forcing a rethink of how retirement money is invested.
Baleni’s comments matter because the GEPF is not a small player. It protects the retirement savings of more than 1.7 million members and pensioners, making it one of the most important institutional investors in the country. For decades, the fund has carried a reputation for stability, and Baleni was at pains to point out that it has never had to go cap in hand to National Treasury to plug a shortfall.
That track record, he said, is the result of solid investing over the past 30 years. But in a world where wars, commodity shocks and political instability can move markets overnight, Baleni warned that the fund can no longer rely on the old playbook.
According to Baleni, the war in Iran alone caused the fund to lose R200 billion in the first week. That figure underscores just how exposed South African retirement capital can be when international tensions spill into financial markets. For ordinary public servants, the headline number is more than a technical concern — it is a reminder that pension wealth is tied to events far beyond our borders.
Baleni said the lesson is clear: the GEPF must adjust its investment strategy to reflect a more volatile global environment, while still delivering strong returns for current and future retirees. In practical terms, that means looking at assets that can produce growth while also helping South Africa solve some of its own economic problems.
GEPF looks to infrastructure as it rethinks its investment strategy
One of the biggest shifts now being considered is a stronger push into infrastructure investment. Baleni said the GEPF wants to back projects that support development and generate returns at the same time. That could include roads, energy, logistics and other long-term assets that help the economy function better.
As he put it, the fund cannot simply preserve retirement savings in a passive way. It also has a responsibility to help the country grow, because weaker economic growth ultimately damages pension outcomes too. That is a message many South Africans will recognise: if the economy stalls, the pool of workers contributing to retirement funds shrinks, and the pressure on the system grows.
Baleni linked this directly to South Africa’s unemployment crisis, saying the country needs more people in work and contributing to retirement funds if it wants long-term stability. That point lands at the heart of the retirement debate. A pension system is only as healthy as the labour market feeding it.
He also confirmed that the GEPF is not limiting its search for growth to South Africa alone. Baleni said the fund is actively looking beyond our borders for opportunities, pointing to a recent trip to Nairobi and wider interest in East Africa. He said the region is doing “excellent work” and could offer lessons for how the fund expands and protects value in future.
That outward-looking strategy suggests the GEPF is trying to balance caution with ambition. The fund is not chasing reckless bets, Baleni stressed. But it is prepared to take measured risks where there is a clear path to returns. As he explained, the fund does not “provide grants” for every project — it calculates where the upside justifies the exposure.
He pointed to the mining sector as one example of this approach. The GEPF is already the largest single investor in the mining space, but Baleni said the fund previously did not have a dedicated exploration budget. That has now changed, with an exploration allocation designed to create a pipeline of future opportunities. In other words, the fund is trying to seed tomorrow’s returns today.
Baleni was careful to reassure members that this does not mean the fund is taking wild chances. His message was that the GEPF is prepared to accept “small risks”, but only where the longer-term returns are credible. For a pension fund of this size, that distinction matters. A conservative approach can protect capital, but too much caution can leave the fund behind inflation and weaker growth.
At the same time, the pressure on ordinary South Africans is making retirement more complicated. Baleni raised concerns about the financial strain facing workers and pensioners, especially in a country where many households support extended family members well beyond the nuclear family. That reality means retirement income is often stretched thinner than many policymakers assume.
He also returned to the controversial two-pot retirement system, saying he had been among those who opposed it. Baleni argued that allowing early access to retirement savings can create pain later in life, because money withdrawn in moments of crisis is money no longer available at retirement. The problem, he said, is not just about individual discipline — it is about a society where too many people are under financial pressure every month.
The two-pot system was meant to give workers some emergency access to their retirement money without fully cashing out their savings, but critics warn that it may encourage short-term decisions with long-term consequences. Baleni’s position is that the underlying issue is not the system alone, but the economic stress driving people to use it.
He said the real solution is to create more jobs and reduce the pressure on workers who support extended families while also trying to save for old age. That, he argued, would ease the need for withdrawals and strengthen the retirement system over time.
For now, the GEPF is facing a complicated reality: global conflict can erase value fast, local unemployment is weakening the base of contributors, and the needs of members are growing more urgent. Baleni’s message is that the fund must adapt — by investing smarter, looking broader and backing the kinds of assets that can keep South African retirement savings resilient in a far more uncertain world.