Billions lost from government pension fund

South Africa’s Government Employees Pension Fund (GEPF) has written off R3.6 billion of investments in various companies, including Daybreak Foods and Independent Media. 

These write-offs were revealed in the fund’s annual report for the 2024/25 financial year, which was tabled in Parliament on 18 November. 

The fund is the largest of its kind in South Africa, with its investment portfolio rising 13% to R2.69 trillion in the past financial year. 

It manages savings on behalf of 1.26 million government employees across all levels of the government. Around 560,000 South Africans rely on it for pension payouts. 

This strong rise in assets under management was largely driven by the performance of local and international equities, with the JSE benefitting immensely from a spike in commodity prices. 

The vast majority of these funds are managed by the Public Investment Corporation (PIC), a state-owned asset manager that is the largest investor in Africa. 

Through the PIC, the GEPF is heavily invested in domestic and foreign equities, with R1.7 trillion invested in various companies listed on stock exchanges around the world. 

In 2024/25, these investments had a particularly strong year, rising by 42% year-on-year as the JSE returned over 40% in dollar terms over the past year. 

Crucially, these investments are liquid and transparent, with companies listed on stock exchanges heavily scrutinised by analysts and regulators. This makes them a relatively safe investment for a fund of this nature. 

Coupled with the GEPF’s investments in domestic and foreign bonds, worth R830 billion, the pension fund had a very strong year. 

South African government bonds in particular have performed strongly, with the GEPF’s bond portfolio rising by 18.9% in the past financial year. 

However, where many of the GEPF’s problems, and where most of its losses come from, are in unlisted investments that are illiquid and significantly less scrutinised. 

In the past year, these investments have created substantial trouble for the pension fund, with it having to write off R3.6 billion worth of investments. 

These investments are typically in relatively unknown companies that have significant potential, but also relatively higher risk due to the lack of liquidity and public scrutiny.

PIC trouble

The PIC, responsible for the lion’s share of the GEPF’s assets, has been under fire recently for potential corrupt dealings and impropriety. 

Apart from this, it has also made a string of bad investments, with Daybreak Foods being a particularly severe case. The company is currently in business rescue. 

Earlier in November, the Hawks revealed that it is investigating 11 cases related to corruption and impropriety at the PIC. 

Some of these cases relate to historic cases of corruption identified during the Mpati Commission, which was launched in 2018 to investigate the misuse of funds at the asset manager. 

The commission found serious governance and ethical failures at the PIC, with employees misusing their positions for personal gain.

In some cases, such as a deal to acquire a stake in Total South Africa for R1.8 billion, the purchase price was revised down to R1.7 billion, with R100 million going towards “transaction fees”. 

The commission’s investigation found that the R100 million ended up going to BEE entrepreneur and businessman Lawrence Mulaudzi and not towards buying shares in Total South Africa. 

This mismanagement also resulted in a series of losses on significant investments, using government employees’ pension funds, in companies in South Africa. 

The most public of these failed investments has been the collapse of Daybreak Foods, which was one of the largest chicken producers in South Africa. 

The PIC initially bought Daybreak for R1.19 billion in 2015, but it has now allocated over R2 billion in capital to the state-owned company to keep it afloat.

In 2025 alone, the PIC has pumped an additional R200 million into Daybreak to stave off its potential liquidation and fund its business rescue process. 

Daybreak entered business rescue in May 2025 after reports emerged that it failed to pay staff in April and thousands of chickens were culled due to poor living conditions. 

The National Council of the Society for the Prevention of Cruelty to Animals (NSPCA) said in April it had to cull more than 350,000 birds from various farms that rear them for Daybreak after they were left without feed for days, resulting in mass cannibalism.

The NCSPCA said staff at several sites had not been paid, and thousands of dead chickens were left in the growing sheds.

Following these reports, the PIC gave Daybreak R74 million to provide immediate working capital, which helped it pay staff and improve conditions at some of its farms. 

A month later, in May, the PIC supported calls for the company to be placed into business rescue and gave it a further R200 million to fund proceedings.

This was a far cry from the Daybreak of the past, when it was one of the country’s largest poultry producers. 

Established in 2001, its operations included the entire poultry value chain, from breeding and hatcheries to broiler farming, feed milling, and chicken processing.

This allowed the company to deliver fresh frozen chicken products to the local market, employing over 3,400 South Africans.

At peak capacity, the business produced nine million birds per cycle of 34 days, making it one of the largest poultry producers in the country.