SPEED UP PROVIDENT FUND CONVERSION

Sir,

The conversion of the Eswatini National Provident Fund (ENPF) into a national pension scheme is being delayed unnecessarily by people who have a vested interest in this issue.
This conversion was supposed to be a critical component of the government’s comprehensive social security agenda.

Convert

When implemented well, it will mean that Provident Fund members will be required to convert, at least two thirds of their retirement savings, into an annuity or pension when they reach retirement, instead of a once-off large sum of cash. In the current scenario, people work for years and retire to be beggers, because they will have already drawn their provident fund at the age of 50, or after losing employment. This is bad for government’s social security, because it now has to take care of the retired workers through grants. We all know that these grants are not enough to cover the living expenses of the people.

In light of this, we expected those in authority to take the conversing issue seriously, instead of looking at how the public service will be affected. What about the thousands of workers in the private sector? They need to have  retirement security at the age of 60. It will also encourage employers to provide retirement saving plans to their employees, as part of the employment contract, while ensuring that employees receive good value for money for their retirement savings. Employees should then be assured that their savings are prudently and diligently managed. They must also be kept informed of their retirement savings.

Benefits

This will have the benefits of ensuring that the standards of retirement fund governance, including trustee knowledge and conduct, and the protection of members’ savings is guaranteed. We also expect that members of provident funds will, similar to members of pension and retirement annuity funds, now be able to claim a tax deduction on their contributions to their funds, which has the potential to increase take home salaries. The ENPF must ensure that trustees of retirement funds manage the funds diligently and properly, and that employers will now be personally liable for failure to transfer collected retirement contributions. It has been over ten years since the process was initiated, but there is no breakthrough. The new chief executive officer at the ENPF promised that this will be a priority during her term, and we pledge to fully support her, as workers.

Since this will be a voluntary decision, there is no reason to delay it. People must be made to fill out forms stating if they want to convert or not.If one has been working for 20 years, surely they have saved R100 000 and can afford to cash out E33 000 and convert the rest to help him until he dies. The E33 000 cashed out is enough to start a small spaza shop that will help to sustain one every month. I think the commitment to convert is skewed. MPs and the workers want this to be done, while some clandestine forces in government and in these pension funds are against this, for whatever reason.

This is wrong because it will worsen the poverty situation and result in many people retiring to hunger.  Government must draft labour inspectors to ensure that deductions are effected, as per the ENPF Act.

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