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Dear Member/Pensioner,

As the Chief Executive and Principal Officer of the Eskom Pension and Provident Fund (EPPF), I would like to provide the latest information on a number of critical matters relating to the Fund in order to allay any concerns you may have as a member of this Fund.


Former Eskom Group Chief Executive Officer (GCEO) pension pay-out matter 

The media continues to follow the matter relating to the pension pay-out of the former Eskom GCEO, Mr. Brian Molefe.

Since 2017, Mr Molefe has appealed the judgment against him through the High Court, the Supreme Court of Appeal, and the Constitutional Court. His Constitutional Court appeal was dismissed in late 2019. The Constitutional Court made a costs award in respect of all three appeals against Mr Molefe. Mr Molefe has settled the cost orders apart from the High Court, which he is disputing.

The Fund has not received a date from the court clerk for the hearing of the application. The court roll is severely backed up due to the National Disaster declared in March 2020 due to the COVID-19 pandemic. We will continue working with and through the courts to recoup the monies that Mr Molefe owes to the Fund.

Investment performance 

The EPPF's primary purpose is to provide retirement benefits to its members, now and into the future. Pensioners rely on the Fund for their monthly income, and the Fund must also remain sustainable so that even today's active members can retire securely when they reach retirement age. The Fund's investment performance is therefore an important indicator of success as it pertains to our sustainability.

Another important indicator is the funding ratio, which is determined by the Fund's independent actuary as a measure of the extent to which the Fund's assets cover its current and future liabilities over the long term. A healthy funding level for a pension fund is above 100%, and we are pleased to report that the EPPF's funding ratio was well above 100% as of 30 June 2020, which is the EPPF's financial year-end.

Despite the torrid volatility in the financial markets brought about by the COVID-19 crisis, the Fund ended the financial year with assets under management of R144.6 billion, as at 30 June 2019. In early 2020, the Fund's assets had reached a high of R150 billion, but plunged to lows of R114 billion in March 2020 as the effects of the outbreak of COVID-19 and full or partial lockdown in various economies hit financial markets across the globe.

The Fund holds a portfolio of diversified assets which are invested in South Africa and other regions around the world. The resilience of this diversified portfolio proved evidence of the adage that warns against putting all of one's eggs in one basket. While the value of the local assets dropped sharply, the assets invested in international assets earned good investment returns for the Fund as the Rand weakened against the major international currencies.

Throughout this volatility, the EPPF investments team worked tirelessly to see the Fund recover from the initial losses suffered, and took advantage of opportunities to buy good assets at attractive valuations. As the lockdown began in March 2020, the Strategic Investment Committee (SIC), a sub-committee of the Board, acted proactively by holding a workshop with teams of independent actuaries and Fund management to establish if any changes to the investment strategy or the Fund's capital market assumptions needed to be made.

We remain confident that we are on the right path to achieve the Fund's investment objectives over the long run, although in the short and medium-term the Fund has not met its target investment return of CPI + 4.5%.

We will continue to be agile and discerning in the management of the Fund's investment portfolio in the best interest of our members and pensioners. For a report of the investment performance for FY2020 (as at 30 June 2020), click here

Update: Daily Maverick unfounded allegations 

Between January and June 2020, the EPPF came under the spotlight of the Daily Maverick, an online publication which made multiple allegations against the Fund. In the main, the reports were:

  • Fears that the Fund would not be able to implement a change in its pension administration system effectively, and that consequently, pensions would not be paid. These fears proved to be unfounded and spurious, and the Fund has paid its pensioners using the new pension administration system since April 2020.
  • Accusations of impropriety in the Fund's procurement processes. We assure our members and pensioners that the Fund has a Procurement Policy and Delegation of Authority that ensure effective oversight and impartiality in the appointment of service providers.
  • The matter of the former Eskom GCEO's pension payment, and the eligibility of other senior executives of Eskom and EPPF for admission as members of the pension fund, which matter is before the courts.
  • The Fund's administrative costs, including the remuneration of Trustees. The EPPF used its right of reply to address these matters on the Daily Maverick platform and made it clear that the Fund is in fact, more cost-effective compared to most of its peers, and that the analysis published by Daily Maverick had been based on flawed assumptions.
  • Other claims made were sensationalist and not based in fact.

The Fund approached this onslaught by implementing a two-pronged approach of systematically disproving the Daily Maverick's allegations while also restoring the trust and confidence of its stakeholders through direct engagement and attracting more balanced reporting from reputable media houses such as Business Day, Business Times, City Press, Financial Mail, CNBC Africa etc.

The EPPF lodged a complaint with the Press Council against the Daily Maverick and as reported in a previous communication, the publication was found guilty of not affording the Fund an opportunity to reply. The right of reply is a basic right that the media are supposed to afford organisations that are subject to media scrutiny. A number of the allegations could have been clarified or dismissed if the Fund had been afforded this right, and if the journalist involved had complied with the Press Code.

The EPPF supports press freedom and we remain on good terms with all our media partners including Daily Maverick, and they continue to engage with us in all matters relating to the Fund.

Daily Maverick published an apology on 8 September 2020 after the Press Council found that the Daily Maverick had consistently neglected to give the EPPF an opportunity to respond to specific allegations which were of a serious nature. The Ombudsman ruled that Daily Maverick's actions were in breach of certain sections of the Press Code.

The Council did not, however, rule on the validity of the allegations and this has caused some queries to be directed to the Fund in this regard. We assure our members and pensioners that the Fund is governed by strict policies, clear processes and the oversight offered by the Board of Trustees - which represents all stakeholder groupings including Eskom Holdings SOC, organised labour, pensioners and active members. As the leader of this organisation, I commit to ethical leadership, operational excellence and good governance. I hope that this update has provided some useful information and assured you that the Fund, and your retirement savings, are in safe hands. We will keep you updated if there are any further developments on the matters mentioned here. The Fund, as always, commits to making decisions in the best interest of its members and pensioners. 

Yours sincerely,

Linda Soga Mateza

Chief Executive and Principal Officer: EPPF

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