Africa-Press – Eswatini. The Public Service Pensions Fund (PSPF) has endorsed the increase of the pension lump sum pay-out from 25 to 33 per cent.
This was revealed during the Stakeholders Forum held at Hilton Garden Inn last Tuesday.
PSPF’s Chief Executive Officer Masotja Vilakati speaking during the meeting told the stakeholders that the Fund would increase the pension lump sum payment.
The stakeholders included the Public Service Pensioners Association and Public Sector Associations (PSAs) that consists of the Swaziland National Association of Teachers (SNAT), Swaziland Democratic Nurses Union (SWADNU), National Public Services and Allied Workers Union (NAPSAWU) and the Swaziland National Association of Government Accounting Personnel (SNAGAP).
The session focused on five thematic areas, including the increase of the pension lump sum pay-out from 25 per cent to 33 per cent, payment of gratuity to contract employees, portability of benefits-resignation, dismissal and deferred retirement, payment of re-married spouses and effects of the Eswatini National Pension Fund (ENPF) Bill of 2020 to the PSPF.
Before the engagement, PSPF stakeholders had suggested that the Fund increased the pension lump sum pay-out by 50 per cent.
The stakeholders had argued that the 25 per cent lump sum pay-out was too little and that a large portion of their contribution went back to the Fund.
They said in that regard it did not benefit them. Stakeholders further stated that upon retiring, the 25 per cent lump sum payout restricted them from improving their lives because even the monthly pay after retirement was halved.
Vilakati said the Fund could only afford 33 per cent of the lump sum pay and rejected the 50 per cent.
“Our actuaries scientifically calculated the proposal and advised us that the 50 per cent benefit to the members would not be sustainable. They were against the increase in view of the deficit of the Fund.
“They argued that the effects of the 50 per cent increase could be severely negative on the Fund. Notwithstanding, they noted that an eight per cent increase would not severely harm the Fund,” Vilakati stated. It was further revealed that beneficiaries would have the flexibility to choose between the 25 per cent or 33 per cent.
“They will not be forced to take the 33 per cent.”
Vilakati further stated that the funding level of the scheme was currently at 80.2 per cent with a deficit of E7 billion that had improved from E10 billion in 2021.
Drivers
He stated that the primary drivers of the defined benefit (DB) of the funding level included investment performance, structure of benefits and time horizon of pay-outs.
Adding, he stated that the scheme was currently on a sound financial position with assets currently at E30.3 billion.
Secretary General of the Pensioners Association, Dominic Nxumalo said they were pleased to learn that the Fund had considered increasing the lump sum pay-out, which would benefit future pensioners. He noted that the recommendations needed to be passed by Parliament and further be gazetted to be functional. Another issue that was not touched on the meeting according to Nxumalo was the issue of medical aid for pensioners.
Nxumalo said they were calling for PSPF to avail medical aid cover for pensioners in order for them to receive quality health services.
He said the 75 per cent that was left when a pensioner received a lump sum pay-out could be used as medical aid.
He said the PSPF funeral benefit was also increased to E10 000 from E7 000.
Initially, the stakeholders had asked for E15 000.
Stakeholders lauded the eight per cent review, stating that it was critical since the pensioner could be able to improve or start any business or creation of stability upon retirement.
“We welcome it and hope that the process of changing the rules gets faster so that our members may benefit. Though we demanded 50 per cent, actuaries advised against that, thus we see the 33 per cent as a step in the right direction,” they said. The stakeholders also asked to be excluded from the debate of the conversion of the Provident Fund to become the Eswatini National Pension Fund (ENPF).
They stated that unions were clear that the public service be excluded from the process as they currently have the PSPF and it was fully functional.
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