Seated at the modest eighth floor boardroom of the Public Service Pension Fund (PSPF) one couldn not put his finger on the exact reason why something so obvious – if it is obvious – had escaped the numbers boffins to get us where we are today.
The setting was the executive management engagement with editors, in which Masotja Vilakati spent the good part of an hour taking the country’s senior journalists on what lies ahead should the Eswatini National Provident Fund (ENPF) conversion go ahead – as it is.
Well, first, maybe let us not get ahead of ourselves. There is still a lot of water to pass under the bridge to the conversion and anything then can still happen. Which is perhaps why it is significant to hold such sessions as the PSPF did with editors; to allow ourselves to be educated, informed, and obviously well positioned to understand where the actual skelems is.
However, there appears along the horizon, a lot of hypertension about how to proceed with this conversion, which for all intents and purposes, is a brilliant and noble idea for which the country will be better off if it comes to pass.
Back at the boardroom of the PSPF, the CEO and his executives gave a very compelling presentation about their financials, their investment portfolio and more importantly, the pension scheme and how it is meaningful to its members for the rest of their lives.
This was all impressive. It makes sense where the PSPF is and why it is considered such a well-run entity, looking after its 41 000 odd members and all those beneficiaries who have since started to enjoy their fruit of labour.
It is at this position that we find ourselves fixated on the conversion of the ENPF to something more similar, if not just as good – except of course, the grim reality that the membership of the ENPF is not blessed with a stable income and employment. It makes it a little complex to run a lucrative pension with the volatility of the private sector employment and generally the type of employee we are talking about.
But, that is besides today’s point. Perhaps in future we can start to talk about why not make a second-tier pension scheme of the larger corporates whose numbers are steadier and perhaps also would mirror what the pension fund has achieved. Admittedly, I know, that is just a far-off conversation that you lot are not ready for.
What boggles me, as Vilakati continues with his presentation, is why it makes so much sense to say that the conversion would make the civil servants scheme worse off, in the manner it is structured.
This is the elephant in the room of the ENPF conversion, in which there is no straight answer. The actuarial scientists at ENPF swear by a different version; that this is not an issue and that it is in fact the best way for civil servants, because it gives them the added benefit of a second occupational scheme.
The PSPF on the other hand makes a strong case for the contributions being diluted and eventually depleting what is left of the cake to share. Therefore, they are adamant the conversion forces members – new member at the very least – to contribute less than what they have been contributing and therefore impacting on the overall contribution.
They would rather a different method is employed – which is that the finance minister goes somewhere in the forest and looks for some money and pays for all of the newer members into the new fund – to care for their contribution. They advocate, very strongly, for government to foot the bill for civil servants if they are so keen on having them form part of the new ENPF.
This, we all know is not rocket science; government has no money and Neal has overborrowed everywhere. There is obviously a strong sense that diluting the contribution does have an effect in the total amount contributed, so where is the science there!
Which is why, my immediate question to the PSPF executive was what are we all missing then? If it is so blatant that the conversion will take away E400 per member from the pension fund as it is now, then how do we cover for that shortfall, if at all?
Vilakati and his team are visibly frustrated by the same thing and are starting to demonstrate last-born tendencies, comparing themselves to other children and why they are not being treated the same way.
Of course, given their history, the pension fund was born in 1993, so it follows that despite their magnanimous success, they are still babies compared to the ENPF that has now turned 51 years.
It is clear too that they are struggling to penetrate the wall that is Cabinet, informing editors that they have not succeeded to make a presentation to Cabinet and that their main desire is for such an opportunity to make their case.
Their frustration is made all the more difficult because it is not clear why something so obvious would then be proposed – even to the stage of it being drafted into a Bill.
It makes all to feel uneasy, about the future, about what we are missing, about what the intensions truly are and most of all, the genius is us that is not seeing this as just a no brainer.
Bare in mind, too that ENPF is saying quite the opposite; that civil servants are not going to be worse off, that this is a positive development for them because it assures them a second pay-out, an added benefit, so to say.
This brings me to the point that is clearly being overlooked. I said last week that we as a country need to have this conversation about retirement and readiness for it; we need to discuss these things of savings and pensions so that we are prepared for the future. The real issue is that we are not forthcoming as a nation; tintfo tentiwa emakoneni and we are suspicious of every little thing!
As I sat in that boardroom, it seemed to me that this country is starting to lack the calibre of leaders who can solve and provide solutions to our challenges. Because, as I have previously hinted, we cannot even trust the legislators to do the right thing when this Bill is debated, we are panicking about everything. You would think, for instance, that Parliament would be trusted to do the right thing with this Bill, but we all know how this will go.
In fact, the danger lying ahead for the debate is that there is so much at stake for Members of Parliament (MPs), who are starting to look ahead to the next term of office, who will be available to the highest bidder. What that information means to the greater scheme of this issue, don’t ask me. All I know is that we cannot bank on MPs to do the right thing.
Perhaps this is why Vilakati and his executive are desperately worried for the future of the fund; perhaps that is why Futhi Tembe and her executive are on the road speaking their truth. It all comes down to the readiness for the biggest debate yet in Parliament – and sadly, we do not think we have the quality of men and women kutsi basichache.
We are left on our own, and the risks so glaring as they are to you and me, not so obvious to those who make the decisions. Sisenkingeni. And from where I sit, we are headed for a long road to a conversion.
