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Pension scheme for top brass

Bongiwe Zihlangu

MASERU — Parliament is working on a new pension scheme to enable a select group of senior government officials to cash in on their gratuities well before they retire.

The proposed law will allow political office bearers, statutory position holders, designated commissioners and “other senior government officials” to get a portion of their gratuities at current value while still serving in government.

It will also enable these elites to draw from the fund a lump sum of 10 percent of their salary for each year of service “to be paid from the gratuity account” at the end of every second year of service.

The Specified Offices Defined Contribution Pension Fund Bill 2011, presented to the National Assembly on Friday by Public Service Minister Semano Sekatle follows similar laws passed in 2010.

Critics have queried the logic of such largesse at a time the government is struggling financially.

During this year’s budget speech Finance Minister Timothy Thahane said the government would have to freeze new posts and state-sponsored international trips because it was broke.

The introduction of the new law in essence means that once again ordinary civil servants are being left out because there is no law providing for them.

“It happens when the parliamentary term is about to end. People need to cushion themselves for a rainy day. It is unfair on the government and on the side of those who are struggling,” said Sello Maphalla, deputy leader of the Lesotho Workers Party.

One of the laws passed last year, the Prime Minister’s and Deputy Prime Minister’s Salaries and Spouses Act 2010 entitles the prime minister and his deputy to 80 percent of their monthly salaries upon leaving office.

It also makes provision for their respective spouses to earn 25 percent gratuities of their monthly allowances after two years of continuous service.

The Members of Parliament Salaries Act 2010, allowing MPs to access 25 percent of their gratuities after two years of continuous service, was also passed in May of the same year amidst public outcry. 

The proposed Specified Offices Defined Contribution Pension Fund states that beneficiaries will be protected from losing out on “certain benefits” during their tenure of office and pension “upon their vacation of office”.

It adds that contributions would be made by both the employer, in this case the government, and the employee on a monthly basis.

“This is to be paid in the bank account of the fund on the first day of each succeeding month for the duration of their membership, at the rate determined by the concerned minister.”

Membership to the fund would be compulsory for the aforementioned group of officials. A member cannot terminate membership while still holding office, according to the proposed law.

With the exception of judges and senior officials eligible for the fund, the draft law says members will be those employed permanently, have served for more than a decade and “have attained the age of 50”.

Judges on the other hand, qualify for the fund if they are on permanent employ, have worked for 15 consecutive years and have attained the age of 65.

The law also makes provision for non-permanent employees to join the fund if they have been contracted for “at least two terms”. 

“An official employed on non-permanent terms is only eligible to a pension upon completion of two consecutive terms whose aggregate is no less than five years,” states the Bill.

Upon retirement, a member will be entitled to a pension “purchased for the pool” by the fund credit.

“A member shall have the option of exercising a communication of up to a maximum of 25 percent of the pension and receive that amount in cash and the balance of 75 percent in the form of annuity.”

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