By Mbono Mdluli
MBABANE – The transformation of the Eswatini National Provident Fund (ENPF) into a pension fund will not have any adverse effects on the Public Service Pension Fund (PSPF) or any other pension scheme.
This assurance was given by ENPF Chief Executive Officer (CEO) Futhi Tembe in response to concerns about the implications of the conversion.
Speaking on Eswatini TV, Tembe stated that ENPF had engaged with PSPF on multiple occasions and reassured them that there was no need for concern.
According to Tembe, PSPF initially expressed apprehension regarding the sustainability of ENPF once it became a pension fund. However, ENPF addressed these concerns by explaining the provisions of the Eswatini National Pension Fund Bill. She emphasized that the new pension scheme was designed to coexist with other pension funds without causing disruptions.
A key aspect of the design, she noted, was a contribution ceiling set at a low level to ensure that existing pension schemes would not be negatively affected. She illustrated this with an example of an individual earning E7 000. Under the proposed system, 20 percent of this salary—equivalent to E1 400—would be allocated for pension contributions. Out of this, only E400 would go to ENPF, while the remaining E1 000 would be directed to PSPF. Tembe clarified that this was a hypothetical scenario based on the current situation.
She firmly stated that there was no risk of the national pension fund undermining the PSPF.
The approval of ENPF’s conversion into a pension fund was confirmed last month when local newspapers reported that the Cabinet had given the green light to the transformation. The change means that ENPF will shift to a defined benefit scheme, in which retirees will receive monthly pension payments for life, in addition to a lump-sum payout. The lump sum will be calculated based on the number of years a member has contributed to the scheme.
The announcement of the Cabinet’s approval was made by Prime Minister Russell Mmiso Dlamini during his address at the Cabinet Retreat, held at the Royal Villas in Ezulwini from January 20 to January 24, 2025.
The conversion marks a significant shift in Eswatini’s pension landscape, aiming to provide long-term financial security for contributors while ensuring the sustainability of the broader pension ecosystem.
