RSTP DEFAULTS ON PENSION, RETIREES EMPTY-HANDED

PHOCWENI – The Royal Science and Technology Park (RSTP) has been inconsistent in remitting pension payments to retirement fund administrators.

This has caused delays for retiring employees and their relatives in receiving their funds promptly. Notably, claims for deceased workers’ relatives have also been affected due to the RSTP’s failure to timely remit the monthly contributions. While the exact amount owed to the employee benefit consulting company remains undisclosed, the RSTP employs over 200 individuals. The number of affected retirees could not be ascertained but a couple of them called this newspaper to register their complaints against the company’s pension fund, which has left them frustrated and greatly inconvenienced. However, assuming a conservative monthly contribution of E1 000 per employee, the employer’s total contribution could reach E3 000 per employee. This is reportedly possible if the employer’s contribution is E2 000.

Default

Sources suggest that the RSTP defaulted on payments for two to four months, possibly not up to five months though. If the default occurred thrice, the parastatal might owe E1.8 million, considering all 200 workers contribute E3 000 monthly (E1 000 from employees and E2 000 from the employer). Alternatively, if half of the workers contribute E3 000, and the other half contribute E1 500 monthly over three months, the total owed could be E1 350 000 (E900 000 for the E3 000 contributors and E450 000 for those contributing E1 500). Senzo Malaza, the Senior Communications Officer at RSTP, acknowledged the pension remittance inconsistencies and apologised to affected employees and their families. He assured that the company is diligently addressing the shortfall caused by circumstances beyond its control.

He said the Ministry of Information, Communication and Technology has shown unwavering support in resolving the issue satisfactorily. Sources indicate that the pension fund fell into arrears due to underfunding, leading management to utilise retirement funds for salary payments.Busangani Mkhaliphi, Director of the Public Enterprises Unit (PEU), highlighted the RSTP’s cash flow challenges impacting operations and strategies, emphasising the need for urgent resolution. This she revealed in one of her quarterly reports. She said she was made to understand that government’s fiscal position caused this challenge. However, it must be said the RSTP had received E18.86 million subvention for the quarterly period ended June 2022.

Deficit

Mkhaliphi commented that the RSTP incurred a deficit of E5.32 million, compared to a surplus of E8.35 million recorded in the last review period ended March 2022. The deficit was attributable mainly to the RSTP generating less other income and receiving less subvention compared to the last quarter. She said the public enterprise lacked coordinated effort to implement the Information Technology (IT) solutions for government. This was due to the silo approach to IT solutions by ministries. It is understood that the RSTP supported the Ministry of Agriculture in the development of the Agriculture Integrated Information System (AIIS) and the Elections and Boundaries Commission (EBC).

The RSTP fund is managed by one of the entities under the Tibiyo Insurance Group. Tibiyo Insurance Group (Pty) Ltd (TIG)is the group holding company of Tibiyo Insurance Brokers (Pty) Limited (TIB), Swaziland Employee Benefit Consultants (PTY) Limited and Tibiyo Administrators and Premium Payment Plan (PTY) Limited. These are companies incorporated in Eswatini and wholly owned by local shareholders. The Eswatini Employee Benefit Consultants (Pty) Ltd is a member of the Tibiyo Insurance Group. It was established in 1985. It is a retirement fund solution provider for employers in the country and is one of the largest private providers of retirement fund administration and consulting services in the Kingdom of Eswatini.

One of its investment portfolio is the Sibaya Umbrella, which, at some point, had assets in excess of E520 million. It is the third largest fund in Eswatini. Sibaya offers retirement fund solutions tailored to include administration of funds, maintenance of fund accounts, benefit consulting, actuarial services, insurance broking without the employer ever having to establish their own fund.

Divided

Meanwhile, the RSTP is divided into two divisions - Information Technology Park and the Biotechnology Park.It manages about 317.17 hectares of land, for which 152 hectares is dedicated to industrial development land and 165.17 hectares are shared between research and laboratories, administration centres and residential buildings. Primarily, the RSTP was established to focus on the following activities:

• Agriculture, plant and animal biotechnology.
• Environment and biodiversity.
• Medical biotechnology.
• Biofuels, biofertilisers, biopesticides, biochemicals and bioenergy products.
• Bioprocesses, product development, and bioinstrumentation.
• Human resource development.
• Creation and strengthening of infrastructure in existing institutions and setting up new institutions.
• Basic research in new biology and biotechnology.

His Majesty the King, the pioneer of the RSTP, wants the facility to be a sustainable development built on the developmental elements of compatibility, diversity, identity and efficiency for future physical development. In 2022, in related or almost related incident, the National Workers Union in Swaziland Higher Institutions (NAWUSHI)  informed its members that the University of Eswatini (UNESWA) Pension Fund was operating at a loss of E192 million. This was confirmed by a report of the UNESWA Board of Trustees for the year ended March 31, 2021.

The workers complained that the fund was no longer able to pay terminal benefits and other packages of members who resigned from work, retired or died. He said the Board informed them that in order to be able to pay the packages, they had to disinvest from some of the fund’s investments. The UNESWA Fund, at that time, had investments in the country and South Africa. Over the past two years, it had disinvested about E50 million to pay packages of members who resigned from work, retired or died.

Afected

The affected employees numbered 955 members, inclusive of approximately 680 active members and 275 pensioners. In November 2023, over 100 parents took nine pension funds to court, compelling them to avail funds for their immediate needs until Likhwane Beneficiary Fund resumes normal operations. The pension funds were PSI Provident Fund, Eswatini Electricity Company Pension Fund, UNESWA Pension Fund, Eswatini Building Society Pension Fund, Raleigh Fitkin Memorial (RFM) Pension Fund, and Eswatini Civil Aviation Authority Pension Fund.

Others were Royal Eswatini Airways Pension Fund, Eswatini National Provident Fund Pension Fund and Premier Swazi Pension Fund (Pty) Ltd. Other respondents in the case were administrators of the provident/pension funds, Likhwane Beneficiary Fund and the Financial Services Regulatory Authority (FSRA). The funds are established by different employers for the benefit of their employees. The employer and employees enter into an agreement, in terms of which the former would deduct monthly sums from the latter. 

The employer adds a certain amount to that which has been deducted from the employee. The money would then be remitted to the pension fund or fund administrators. When the employee dies, the employer calls the beneficiaries to advise them about how much the employee each of them would receive from the member’s provident fund.

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