FROM LUMP SUMS TO LIFELONG SECURITY
I once met a man, we shall call him Malcom, who had worked for 35 years, rising through the ranks to eventually become a factory supervisor. Every month without fail, his provident fund contributions were deducted. When the day of his retirement finally arrived, he received a lump sum. These were his earnings of decades of sacrifice, and sweat.
But within weeks, it was gone. Relatives lined up at his door for help with school fees, debts demanded urgent repayment, and medical expenses consumed the rest. By the second month of his retirement, Malcom had no cushion, no income, and no way to sustain the life he had worked so hard to build. Malcom’s story is not unusual. It is the story of thousands of emaSwati.
Studies by the Eswatini National Provident Fund (ENPF) and Eswatini Economic Policy Analysis and Research Centre (ESEPARC) show that within a month of retirement, most workers who receive lump sums are left with nothing. What follows is abject poverty. People who spent decades contributing to the economy now depend on family hand-outs, loans, or charity to survive. As His Majesty’s Government, we cannot look away from this tragedy. And we will not.
A fundamental duty of His Majesty’s Government is to ensure the welfare of all the people, and this responsibility forms the core of the social contract it holds with every citizen. This mandate is further reinforced by His Majesty King Mswati III's vision for Eswatini to become a developed nation. To achieve this, the country must move forward increasingly and meaningfully, which includes strengthening social security to protect citizens from poverty and hardship.
Minister of Labour and Social Services Phila Buthelezi.
The implementation of a new national pension scheme is a direct action in fulfillment of this vision, demonstrating the Government's commitment to securing the long-term well-being and dignity of all emaSwati. The implementation of a national pension scheme is the Government's direct response to the call from the people of Eswatini during Sibaya at Ludzidzini Royal Residence to work hard, strengthen poverty elimination efforts, and build robust social security safety nets.
His Majesty’s Government fully trusts ENPF with this historic mandate. Together, we champion open dialogue, parliamentary scrutiny, and a reform that strengthens rather than replaces our existing system, ENPF and Public Service Pension Fund (PSPF) coexisting to deliver wider, more secure coverage.
Why We Must Act Now
This is the heart of the reform we are driving through the Eswatini National Pension Fund Bill 2025.
At its simplest, the Bill replaces the once-off lump sum system with a pension that pays a guaranteed monthly income for life. Instead of watching decades of savings disappear overnight, workers can retire knowing that every month, until their last day, they will receive a stable, reliable income. The proposed legislation is a fundamental reform designed to tackle poverty head-on by ensuring that decades of hard work translate into long-term security.
This new defined benefit scheme protects members from market volatility by pooling risks and providing stable, indexed returns. It is designed for long-term sustainability, requiring a 15-year minimum contribution period to begin fully funded. The fund is also a powerful engine for economic growth, mobilising long-term savings for national projects and strengthening the economy.
It will extend coverage to informal workers and domestic employees for the first time, and it introduces compulsory spouse pensions. In essence, it is a protective social safety net, a key to national development, and a legacy for future generations. This reform is not cosmetic. It is fundamental. It addresses poverty, strengthens national solidarity, and modernises our social protection system in line with global best practice.
The Forgotten Majority: Informal Sector Workers
For decades, large parts of our workforce were excluded from retirement security. Domestic workers, security guards, public transport workers, and many farm labourers lived their whole lives without ever qualifying for a pension or provident fund. They served households, kept businesses safe, grew our food, and transported our children to school, but when old age came, they faced it with nothing.
This exclusion is unjust, unsustainable, and un-Swati. The informal economy employs 60% of our workers, generating E20.5 billion in transactions annually. Yet these hardworking emaSwati, who form the backbone of our economy, have been denied the dignity of retirement security. The new law corrects this injustice. For the first time, informal sector workers will be part of a national pension scheme. Whether you are a maid, a driver, or a vendor, your contributions will count, and you will receive protection in retirement. This is more than an economic reform. It is a moral and social correction.
Principal Secretary at the Ministry of Labour and Social Security Makhosini Mndawe
Why Provident Funds Fail Us
The reality of a provident fund is harsh:
• One lump sum at retirement: which may look large but is easily consumed by immediate pressures.
• No income security: leaving retirees exposed to poverty and dependency.
• No risk pooling: every worker bears the risk of outliving their savings.
By contrast, a pension fund guarantees:
• Monthly income for life: you cannot outlive your pension.
• Risk pooling: contributions are shared, ensuring stability.
• Social solidarity: today’s contributions secure tomorrow’s retirees.
This is why the International Labour Organisation (ILO) consistently advises countries like ours to transition to pension systems. It is the difference between fragility and resilience, between poverty and dignity.
Government’s Duty and the Social Contract
The Government of Eswatini has a solemn duty to protect its people from poverty in old age. Our Programme of Action 2024–2028, under Objective 5, commits us to strengthening social protection and converting ENPF into a pension fund. This is not a political slogan, it is the fulfilment of a social contract. A pension system ensures:
• Universal coverage, extending to all citizens, including informal workers.
• Financial security, guaranteeing a basic standard of living in retirement.
• Social stability, by reducing inequality and poverty among the elderly.
• Portability, so workers can keep their pension benefits across jobs and sectors. In short, the pension fund is not just a financial mechanism—it is a national promise.
Futhi Tembe, ENPF CEO
Economic Strength and Long-Term Vision
This reform is also a cornerstone of our National Development Plan and Economic Recovery Plan 2028. These strategies emphasise job creation, fiscal resilience, and social stability. The pension fund supports them by:
• Mobilising domestic savings for investment in national development.
• Reducing pressure on the state to provide emergency support for impoverished retirees.
• Supporting public debt management through investments in government bonds.
• Creating resilience by keeping investments local and shock-resistant.
Already, ENPF is one of the country’s largest institutional investors, with over E7 billion under management, more than 59% of which is invested directly in Eswatini. This conversion strengthens that role, unlocking new resources for growth, infrastructure, and jobs.
The Role of Civil Servants
Some have raised concerns about civil servants joining ENPF. Let me clarify:
• Current PSPF members will not be moved.
• Only new civil servants will join the national pension fund.
• Contributions will be shared—for example, from an E4, 000 monthly contribution, E400 goes to ENPF, E3, 600 remains with PSPF; just like with all other occupational pension schemes.
This design safeguards PSPF’s sustainability while integrating new entrants into the national scheme. ENPF and PSPF will coexist, complement, and strengthen each other. Moreover, actuarial studies confirm that ENPF is financially viable even without civil servants.
Their inclusion is not about survival but about integrity, solidarity, and economies of scale.
Guardrails for Sustainability
The pension fund is carefully designed with sustainability at its core:
• 15-year minimum contribution period before payouts ensures the scheme starts fully funded.
• Solvency funding models, not ‘best-estimate’ optimism, guarantee stability.
• Scenario testing shows the scheme can withstand shocks and still deliver.
Simply put: the numbers have been tested, the risks modelled, and the system built to endure.
Section 69: No Double Dipping
The Bill also introduces Section 69, prohibiting “double benefits.” This means you cannot claim multiple public pensions for the same event. In layman’s terms, you cannot be paid twice for the same injury, accident, or retirement. This principle is not unique, it is best practice globally.
In Eswatini, for example, workmen’s compensation is deducted from Motor Vehicle Accident Fund (MVAF) claims. In South Africa, payments from the Unemployment Insurance Fund (UIF) and Compensation for Occupational Injuries and Diseases Act (COIDA) are deducted from Road Accident Fund (RAF) claims.
Swazis at esibayeni
A Legacy of Vision
We must remember that this reform fulfils a vision first articulated by His Majesty King Sobhuza II, who said that ENPF should one day be converted into a pension fund. Today, under His Majesty King Mswati III, that vision comes to life. This is more than a policy reform. It is a legacy.
It is Eswatini choosing dignity over poverty, solidarity over exclusion, and security over uncertainty. From Promise to Action I stand today as Minister of Labour and Social Security with one clear message:. Let us all support the Eswatini National Pension Fund Bill 2025.
This is not just an administrative adjustment, it is the most significant social protection reform in our nation’s history. It rescues thousands from poverty, includes the forgotten majority of informal workers, sustains our economy, and honours the founding vision of our nation. Let us not delay.
The time to act is now. Together, with solidarity, courage, and conviction, we can ensure that every emaSwati retires not into fear, but into dignity