Lesotho retirement fund seen driving SA economy
…Govt employees displeased
MASERU – In recent years, many retirement funds have switched from defined benefits to defined contributions. It was no coincidence, therefore, that in 2008 Lesotho also established a fund into which both the government and its employees contributed. It means if an employee contributes M500 per month into the fund, government also equally contributes M500 monthly for that particular employee.
What is worrying, however, is that the Lesotho Public Officers’ Defined Contribution Pension Fund – worth M5.7 billion at the end of the 2018 financial year, is perceived to be boosting the South Africa’s economy without bringing much benefit to the local economy.
Essentially, the retirement fund is a non-profit institution that collects, invests and administers monies contributed by civil servants. The main purpose of the retirement fund is to provide a retirement benefit to the participating members on retirement, or to their dependants in case of the death of the member. But Lesotho government employees are unhappy about some of the terms of the fund and they want this to be reviewed.
Owing to their dissatisfaction, it is doubtful whether the defined benefit to which civil servants belong makes it any easier for members to understand their benefits; whether members have a wider range of choices and greater flexibility; or if there is less complexity in terms of surplus distribution and whether the administration requirements are minimal. So far, the jury is out after a section of government employees petitioned members of parliament about their concerns over the fund.
During the period under review, the fund was invested in mostly South Africa’s various share portfolios and other securities managed by Stanlib Lesotho, Prudential Portfolio Managers, Coronation Asset Management, Investec Asset Management, Foord Asset Management, Mergence Investment Managers and the Central Bank of Lesotho. The fund’s cash portfolios were held by Aluwani Capital Partners.