16 Dec 2020

Assistant Minister for Presidential Affairs, Governance and Public Administration, Mr Dumizweni Mthimkhulu has explained that employees cannot access their pension funds until the time of retirement.

Mr Mthimkhulu noted that public service employee pensions were governed by two pieces of legislation being the Pensions Act, Chapter 27:01 and the Retirement Funds Act, 2014. He further explained that the Pensions Act was a defined benefit scheme in which government as the employer was the sole sponsor while the pension of the employee was computed at the time of retirement.

“As such, the pension thereto entirely depends on the length of service and the last salary the employee was earning at the time of retirement,” he said. Moreover, Mr Mthimkhulu said as per the Retirement Funds Act, 2014, Part VII, provisions relating to pension benefits (Sections 37-41) dictated the terms and conditions of how pension benefits administered under pension funds which fall under this act were to be managed.

“Currently the provisions of the act do not allow workers to encash any pension benefit prior to retirement or use their pension as security for their investment loans pre-retirement,” he said.

Nkange Legislator, Dr Never Tshabang, had wanted to know whether government would allow retirees to encash from their pension funds to cushion themselves as early as possible in view of the depressed economic situation.

Dr Tshabang also asked if it was possible that government would allow workers to use their pension as security for their investment loans. ends