PSPF to increase retirement lump sum pay from 25% to 33%

By Lwazi Dlamini

Barely a fortnight after announcing a 4.2% pension increase for all its beneficiaries effective April 1, 2025, the Public Service Pensions Fund (PSPF) is proposing to increase the lump sum paid at retirement from 25 per cent to 33 per cent.

This is one of the proposals that PSPF has put on the table as part of the ongoing process to review the Public Service Pensions Order No. 13 of 1993.

On Thursday, August 14, 2025, the PSPF Board and Management team met with the Ministry of Public Service Portfolio Committee. The presentation that lasted for about two hours was mainly centred on why the need to review the Public Service Pensions Order, areas that will be reviewed, and the proposed changes to the PSPF Rules.

Then on Friday morning, the Portfolio Committee was taken on a tour of the projects that are currently undertaken by PSPF to assess the progress. These projects were the ESASSCO Building in Mbabane, Paper Tech in Matsapha, and the Oncology Centre in Manzini.

“Since the review started, we engaged our stakeholders in various forums, including our Annual Stakeholder Forum, and most of these inputs we made are informed by the members through these engagements.

The reviews are done to ensure that we continue to deliver our mandate in an accountable, transparent and sustainable manner that ensures that we continue to offer an excellent, memorable retirement service experience to our members,” PSPF Chief Executive Officer (CEO) Masotja Vilakati said.

When quizzed on why PSPF is reviewing the Public Service Pensions Fund order, Vilakati said mainly it is to separate the Act from the rules of the scheme.

“Also, to align the Act and the Rules to the Retirement Funds Act, 2005 and the Constitution of the Kingdom of Eswatini.

To present to the Portfolio Committee about the consultations that were done with the members of the Fund and the Employer and further to ensure a seamless application of all relevant legislation and remove any conflicts,” he said.

He said the Areas of the Act that need to be reviewed include the following: –

Recognition that the Fund is under regulation and supervision by the Financial Services Regulatory Authority (FSRA) and specifically under the Retirement Funds Act, 2005
The Retirement Funds Act, 2005 provides a legal framework with respect to the appointment and removal of the Board of Trustees,

ppointment of the Principal Officer (CEO), reporting intervals, licensing of the pension fund, the expected standards for the conduct of officials of the fund, attachment of pension benefits, distribution of death benefits, etc

The Retirement Funds Act, 2005, also provides definition of terms often used in pension funds, such as dependent, annuity, etc.

For instance, in Section 2 of the Retirement Funds Act, 2005, a “dependent” is defined as someone that the member of the retirement fund is legally liable to maintain, such as a spouse, including those in customary or religious unions; children, including posthumous, adopted, and illegitimate children. It also includes anyone else who would have been legally dependent on the member had they not died. Anyone not legally entitled to maintenance but who, in the opinion of the Board, was dependent on the member for support.

Vilakati further stated that areas of the Rules that need to be reviewed include the following: –
Increase of the lump sum payable at retirement from 25% to 33%
Treatment of contract staff between the Fund and the employer
Portability of pensions, to allow members to transfer their pensions from one employer to the next, in case of resignation
Calculation of the spousal annuity and eligibility in case the principal member dies

“The presentation was, therefore, to acquaint the Portfolio Committee of the identified changes in both the Act and the Rules and ensure that they understand the rationale of the changes.

The process to review the Public Pensions Order, 13 of 1993, is still at the Attorney General’s Office stage. PSPF is finalizing the amendments that were identified by the AG’s Office and will be submitted as soon as they are completed,” he added.