LOBAMBA– Senate deliberations of the Members of Parliament and Designated Office Bearers Pension Fund (Amendment) Bill, 2025 (Bill No. 21 of 2025) have had to be halted.
This came after the Financial Services Regulatory Authority (FSRA) called for more time to assess the proposed amendments to the rules, warning senators that the regulator has not yet approved the changes as required under the governing framework.
Interestingly, the same Bill passed through the House of Assembly stage and was passed by Members of Parliament (MPs).
The Bill is one of five pieces of legislation currently under consideration by the Senate Finance Portfolio Committee. As a result, when the committee worked on clause-by-clause of the Bills, this one was left out, and this is despite an assurance that was given by a representative of the Ministry of Finance that there was no problem continuing with the exercise.
Appearing before the committee, FSRA Manager Legal Sipho Gift Simelane thanked senators for the opportunity to make submissions but said the regulator would have preferred more time to thoroughly analyse the proposed amendments before deliberations reached the current stage.
Simelane explained that although FSRA had reviewed the Bill and noted that it seeks to amend the rules governing the Members of Parliament and Designated Office Bearers Pension Fund, widely referred to as MOPADO, it had not been given the opportunity to fully assess whether the proposed amendments comply with the regulatory framework.
He informed senators that Rule 46 requires amendments to MOPADO’s rules to be approved by the registrar before they take effect.
However, the authority had not received a formal application seeking approval of the proposed amendments and was therefore unable to confirm compliance with the rule.
As a result, FSRA requested that it be given an opportunity to receive the proposed rule amendments together with the supporting documents for assessment before the matter proceeds further in Parliament.
The regulator also questioned whether the necessary ministerial processes had been completed.
Simelane said FSRA’s understanding of the law is that amendments to the rules require ministerial consent.
However, because the authority had not received the complete approval package, including documentation reflecting the ministry’s position, it was unable to determine whether all legal requirements had been satisfied.
Another concern raised by the regulator related to the financial implications of the amendments.
Simelane said changes of this nature could affect the financial soundness of the pension fund and, under the regulatory framework, should be supported by an actuarial evaluation confirming the fund’s long-term sustainability.
He said FSRA had not received such an actuarial assessment and therefore lacked sufficient assurance regarding the fund’s long-term financial health.
The regulator also had several technical questions for MOPADO, which Simelane said could be addressed within agreed timelines without unnecessarily delaying the legislative process.
Chairperson of the Senate Portfolio Committee on Finance, Senator Tony Sibandze, acknowledged that FSRA is the statutory regulator of MOPADO and that its concerns warranted serious consideration. However, he also observed that Parliament had notified stakeholders about the Bill in good time and had published its legislative programme.
He suggested the notification may simply have been overlooked by the regulator, while maintaining that Parliament had made every effort to inform interested parties.
Addressing the concern over ministerial consent, Sibandze pointed out that the Bill had been introduced by the minister for Finance, who had remained actively involved throughout the legislative process, including during clause-by-clause consideration. He therefore believed the ministry fully supported the proposed amendments.
On Rule 46, Sibandze suggested it was possible that MOPADO had already submitted the required documents to FSRA and that the application could simply be awaiting processing. He nevertheless cautioned that granting the regulator additional time would inevitably delay passage of the Bill. Responding to the regulator’s concerns, MOPADO said the submissions were reasonable and agreed that an actuarial valuation is an important requirement.
Representatives of the fund explained that MOPADO is currently finalising its financial statements and that these would be submitted together with the actuarial valuation once completed. According to the fund, those are the only outstanding documents required to complete the regulatory process.
Sibandze reminded both FSRA and MOPADO that they were before Parliament to assist senators in scrutinising the legislation.
He stressed that although the Senate has the authority to pass laws, Parliament exercises that responsibility after consulting stakeholders and the nation.
FSRA’s submissions drew concern from several senators, who questioned why the regulator’s objections had only emerged after the Bill had already advanced through several stages of the legislative process.
Senator Siphelele Mkhonta said he appreciated the regulator’s position and recognised that Rule 46 imposes legal obligations on FSRA.
However, he noted that Bills are advertised publicly for 30 days to allow interested parties to submit comments or objections.
He therefore found it surprising that the authority was only now indicating that it had insufficient time to assess the amendments.
Senator Lizzie Nkosi shared similar concerns, saying Senate now found itself in a difficult position because FSRA is an independent statutory authority whose legal responsibilities cannot simply be ignored.
She said if the regulator had neither been consulted nor afforded an opportunity to assess and approve the amendments, senators could not proceed as though everything was in order.
Nkosi proposed that Senate consider granting FSRA the time it had requested and postpone further deliberations to ensure all legal requirements are properly complied with.
Supporting that position, Senator Dr Stukie Motsa urged the committee to allow FSRA sufficient time to complete its assessment so that the law would be followed correctly.
Senator Isaac Magagula questioned how the Bill had already passed through the House of Assembly without the regulator raising similar concerns.
He asked whether FSRA had participated in proceedings in the lower House and, if so, whether it had raised the same issues there. Although disappointed that the matter would delay Parliament’s work, Magagula said he trusted the regulator was acting in good faith rather than attempting to frustrate the legislative process.
Seeking further clarity, Sibandze requested that Rule 46 be read into the parliamentary record and asked FSRA how much time it would require to complete its assessment.
He also enquired whether the regulator had engaged MOPADO after receiving Senate’s invitation to appear before the committee.
Responding, Simelane explained that Rule 46, titled Amendment to the Rules of MOPADO, provides that the Board may, subject to the approval of the registrar, amend the fund’s rules. The rule further states that amendments may not be made until the evaluator is satisfied that they are financially sound.
Sibandze observed that the provision uses the word ‘may’ rather than ‘shall’, prompting discussion over whether the rule gives the regulator discretion.
FSRA maintained that the wording indeed grants the authority discretion to approve amendments.
Simelane explained that under the Retirement Funds Act, pension funds first obtain registration from the regulator before submitting their rules for approval. Once approved, the funds are permitted to operate.
He said MOPADO differs because it is established through legislation rather than the standard registration process. Nevertheless, he maintained that any amendment to its rules should still be submitted to the registrar for consideration and approval.
Simelane acknowledged that FSRA may have missed the public advertisement of the Bill, explaining that the authority ordinarily expects retirement funds to submit formal applications directly to the regulator in accordance with the Retirement Funds Act.
He suggested stronger engagement between MOPADO and FSRA in future to prevent similar situations.
The regulator also assured senators that it was not deliberately delaying the legislative process.
Simelane said FSRA broadly supports the proposed amendments and may ultimately conclude that they fully comply with the law once all outstanding documents, including the actuarial valuation, have been received and assessed.
However, he stressed that the authority has a statutory responsibility to ensure the continued safety, stability and financial soundness of the fund before granting approval.
The Ministry of Finance submitted the MOPADO (Amendment) Bill of 2025 for consideration by Parliament.
The Bill seeks to amend the Members of Parliament and Designated Office Bearers Pension Fund Act, 2013 so as to prescribe a new rule for the payment of annuities to re-elected or re-appointed members of the fund.
Specifically, this new provision states that a member who is re-elected to Parliament or re-appointed to a designated office for a second term, shall not be paid by the fund the annuity benefit and that such benefit shall be preserved by the fund. Currently, a member is entitled to an annuity payment for the previous term irrespective of re-election or re-appointment into office and this has put a strain on the Fund.
However, this new rule provides for a modified approach for members re-elected or re-appointed for a third term as such members shall receive as an annuity from the fund monies that accrued during their first term, while monies accruing during the second term shall be preserved by the fund.
Finally, with respect to a member who is re-elected to Parliament or re-appointed to a designated office for a fourth or subsequent term, the fund shall pay to that member the pension benefits as a lump sum up to the third term.
Benefits accruing to the member relating to the fourth or subsequent term shall be preserved by the fund to be payable to that member upon separation with the fund.
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