By Nomfanelo Maziya | 2024-10-30

The Public Service Pension Fund (pspf) has recorded a remarkable 107.1 per cent increase on its net surplus to reach E2.9 billion in the financial year ended March 31.

This significant increase from the previous year's E1.4 billion surplus has bolstered the Fund's assets to E34.6 billion from E31.7 billion in 2023

According to the fund’s annual report 2024, a key driver of this positive performance was the strong performance of global listed equities, which delivered a 9.6 per cent return.

“This resulted in positive realised gains,”  the report reads..

Additionally, the depreciation of the Lilangeni against major currencies such as the US Dollar, British Pound, and Euro contributed to positive revaluation gains of E1.9 billion.

The Fund maintained its strategic asset allocation, investing 34 per cent of its assets in South Africa, 23 per cent offshore, and 43 per cent domestically.

According to the actual asset allocation by region, the fund invested E14.8 billion of its total assets within the kingdom, E11.6 billion in South Africa and E7.9 billion offshore.

The South African portfolio, managed by various investment firms, delivered a modest 3.2 per cent return, mainly due to the load shedding challenges.

 

“Other factors attributed to the poor performance of this portfolio were the rising geopolitical risks emanating from Israel-Palestine tensions and the Russian-Ukraine war, which resulted in disruptions in the supply chains and rising commodity prices,” says the fund.

In contrast, the offshore portfolio, managed by STANLIB Global Multi Manager and Alexander Forbes Jersey, significantly outperformed its benchmark, delivering a 33.7 per cent return.

The domestic portfolio, which includes investments in government bonds, equities and corporate bonds, achieved a 9.8 per cent return.

This performance was driven by factors such as interest income from loans, dividends from listed investments, and increased interest rates.

Benchmark

“The fund’s total annual return for the year was 10.8 per cent, which is 2.1 per cent above the benchmark of 8.7 per cent; and 2.2 per cent above the return attained in the previous year,” said the report.

The Fund's strong performance was further supported by pension contributions of E1.3 billion and benefit payments of E1.5 billion.

The Fund remained liquid and met all its financial obligations, including investments in government bonds, private sector corporate bonds and loans to government agencies.

 

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