By 
By Thokozani Mazibuko
The conversion of the Eswatini National Provident Fund (ENPF) into a national pension scheme has received the endorsement of Public Sector Unions (PSAs), albeit with a crucial caveat.
Bawinile Ndlovu, President of the National Public Service and Allied Workers Union (NAPSAWU) and a member of the PSAs, has publicly welcomed the transition while emphasizing the need to safeguard the interests of the Public Service Pension Fund (PSPF).
“We are watching this conversion with a hawk’s eye and we also do not want the PSPF to be involved in this conversion,” stated Ndlovu in an interview with the Eswatini Financial Times.
“Our pension fund should never include or be involved in this conversion.” The focus, she affirmed, remains steadfast on protecting the PSPF’s interests.
The Prime Minister’s announcement confirming the Cabinet’s approval for the conversion comes after over a decade of discussions and deliberations, indicating a significant step forward in establishing a defined benefit pension scheme.
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Under this new system, retiring members will receive a monthly payment for life, along with a lump-sum payout calculated based on their accumulated savings and duration of participation.
Prime Minister Russell Mmiso Dlamini delivered the news during a Cabinet Retreat held at Royal Villas, articulating that a formal Bill will be presented for further Cabinet consideration by the end of February 2025.
Yet not all cabinet members are in agreement. Opposition to the conversion has emerged, particularly from Minister of Public Service, Mabulala Maseko. Allegations rose that he opposed the plan, given his responsibility to protect the PSPF.
However, Maseko clarified his stance, expressing that he would not undermine the conversion initiative while also ensuring that public servants’ interests remain a priority.
PSPF’s concerns are clear; as highlighted in a recent report, they fear potential financial instability post-conversion. The Fund warns that reduced contributions from a dual system could lead it to face a ‘natural death’ if it cannot cover its benefits and expenses due to insufficient funding.
Current contributions to the PSPF sit at 20%, but under the new scheme, they would drop to 10%.
“The situation will worsen,” a spokesperson for PSPF remarked, asserting that any drop in contributions would have a detrimental effect on the Fund’s solvency and sustainability.
In addressing these concerns, the ENPF has stressed that the conversion will not lead to PSPF’s demise. It emphasized that the new national pension scheme will complement existing occupational pension schemes rather than replace them, creating additional avenues for retirement savings for workers.
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“PSPF is an occupational pension scheme just like other pension funds,” an ENPF representative noted. “The national pension fund will serve as the first tier of the social security system, ensuring that beneficiaries have multiple sources of income upon retirement.”
It should be noted that with over a decade of advocacy for this conversion, the stakeholders involved hope that aligning the interests of the PSPF, ENPF, and the broader public will pave the way for a more sustainable and equitable pension system in Eswatini.
The conversion’s approval may finally lead to a resolution for long-standing concerns while ensuring financial security for future retirees.
It is worth mentioning that as the situation evolves, all eyes will be on the upcoming legislative process, as the Ministry of Labour and Social Security prepares to address the various stakeholders’ concerns before finalizing the Bill. In a time where worker welfare is paramount, the direction this conversion takes will greatly influence the retirement landscape in Eswatini.
