LOBAMBA – Former Senator Mbho Shongwe rubbed senators the wrong way when he warned them against turning the pension fund for politicians into a stokvel.
This happened at Senate yesterday where Shongwe participated in the stakeholder consultation for five tax and financial bills under legislative consideration, one of them being the Members of Parliament and Designated Office Bearers Pension Fund (Amendment) Bill, 2025 (Bill No. 21 of 2025).
A stokvel is an informal savings or investment group in which members regularly contribute a fixed amount of money into a common fund. The pooled money is then used according to rules agreed upon by the members.
Shongwe’s warning irked the senators as they deemed it as not proper, with Senator Siphelele Mkhonta calling him to order and asking that he withdraws his statement.
Shongwe told the committee that the original spirit of the Members of Parliament and Designated Office Bearers Pension Fund (MOPADO), established in 1993, had been lost following legislative changes introduced in 2013.
He argued that Parliament made a mistake by replacing the original defined benefit pension arrangement with a defined contribution system, saying the two models could not adequately accommodate members who had joined under the previous framework.
He further claimed that government had failed to make the required contributions when the new system was introduced, creating problems that persist to this day.
According to Shongwe, subsequent amendments allowing members to take lump sum payments had fundamentally changed the purpose of the pension fund.
He maintained that pensions should provide a regular income throughout retirement rather than being treated as an investment vehicle from which members withdraw all their benefits.
He also questioned the consultation process that informed previous legislative changes, claiming that some designated office bearers, including constituency headmen and chiefdom councillors, had not been properly consulted before the law was enacted.
“The pension must make sure that whatever happens, this thing of lump sums, most beneficiaries lose their money and are left with nothing. The original idea was for former parliamentarians to continue receiving something until they pass on,” Shongwe said.
He further argued that the current amendment should be sent back for broader consultation involving all stakeholders before Parliament proceeds with the legislation.
The remarks prompted an immediate response from Chairperson of the Senate Finance Portfolio Committee, Senator Tony Sibandze, who questioned why Shongwe had not specifically identified clauses in the Bill requiring amendment.
Sibandze also took issue with the description of the pension fund, saying members of the committee understood that consultations had been undertaken when the legislation was previously enacted.
“It may be unfair to refer to the fund as a stokvel unless it is untrue that consultations were conducted,” Sibandze said.
Senator Mkhonta was more direct, accusing the former senator of making misleading statements that could confuse the public.
He clarified that MOPADO does not cater exclusively for Members of Parliament, but also covers designated office bearers, including constituency headmen and chiefdom councillors.
Mkhonta further objected to the use of the word ‘stokvel’, saying senators considered the description insulting to an institution established to provide retirement benefits.
“We take offence when he says MOPADO is a stokvel. We are members of MOPADO and that description is degrading. He is free to raise grievances, but he should not insult the institution,” Mkhonta said.
Committee members explained that MOPADO was designed as a pension scheme intended to provide long-term financial security for its members.
Responding to the criticism, Shongwe insisted that his comments had been misunderstood.
He maintained that he had not described MOPADO as a stokvel, but had warned against allowing it to operate like one through excessive reliance on lump sum withdrawals.
“I did not say MOPADO is a stokvel. I said it wants to operate like a stokvel. There is a difference,” he said.
Sibandze nevertheless urged him to withdraw the expression in the interest of maintaining decorum in the House, explaining that senators had found the wording inappropriate.
The chairperson also cautioned Shongwe against banging tables during his presentation, reminding him that as a former senator, he should help uphold the dignity of the House.
The exchange continued after Mkhonta, who identified himself as a MOPADO trustee, disputed several of Shongwe’s claims.
He said the transformation of the pension fund had been carried out through legislation and that those serving at the time had an opportunity to oppose the changes.
He also rejected suggestions that current members would not participate in future stakeholder consultations, describing such remarks as disrespectful.
Beyond the pension Bill, Shongwe also commented on the proposed Income Tax (Amendment) Bill.
He expressed concern over provisions defining taxable income as income derived from ‘any activity’, arguing that the wording was too broad and could create uncertainty in the application of the law.
Shongwe urged Parliament to clearly specify the activities covered by the legislation or provide detailed regulations to guide implementation.
He also raised concerns about some churches that, in his view, generate significant commercial income while operating under the guise of religious offerings and tithes.
“There is the issue of churches whose income appears commercial, but is presented as offerings, tithes and sacrifices. Parliament should properly define what constitutes income when amending the law,” he said. The Senate Finance Portfolio Committee is currently receiving submissions from stakeholders on the five Finance Bills before finalising its report and recommendations to Parliament.
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