Public Sector Pension Bill aims to simplify payments of post-retirement benefits for public servants

IOL News

27-06-2025

The National Assembly has approved the Public Sector Pension and Related Payments Bill, aimed at simplifying pension payments for public servants,
Image: File photo.
THE National Assembly has approved the Public Sector Pension and Related Payments Bill, which is aimed at simplifying how pensions and related post-retirement benefits are paid to public servants. The Bill will now be referred to the National Council of Provinces for concurrence.
The legislation, introduced by the Minister of Finance as part of the 2025 Budget, proposes that public sector pension, post-retirement medical, and other benefit obligations become direct charges against the National Revenue Fund (NRF). This change seeks to streamline administration and avoid delays in payments, according to Parliament.
Parliament said in a statement that 'the current payment system makes it difficult for National Treasury to pay the benefits, as there are administrative requirements to track which department each retired claimant worked in, causing delays and complications.' Trade union federation, the Congress of South African Trade Unions (Cosatu) supports the Bill.
'We were fine with the Bill as it is largely an administrative one that does not have any adverse impact or threaten public sector pensions and related payments,' said Cosatu Parliamentary Coordinator Matthew Parks. 'We are comforted by it correctly recognising that the state is responsible for all public sector and related pension payments. This is crucial to protect workers and pensioners.' Parks added that Cosatu was also reassured by the Bill's support for collective bargaining processes.
'We are pleased that it affirms the role of collective bargaining processes and agreements where matters affecting public sector pension funds are discussed and resolved with organised labour,' he said. 'We have been reassured by Treasury to this effect as well.'
He concluded: 'We are confident that Parliament will conclude the passage of the Bill before the deadline and thus pension funds will remain protected.'
However, the Public Sector Coordinating Union (PSCU) raised several concerns about the Bill's structure and safeguards, especially a clause that Parliament's Standing Committee on Appropriations had also flagged.
The Standing Committee had noted that while it supported the Bill, it had concerns with a clause that says, 'If Parliament does not approve or reject changes to the list of benefits within three months, those changes will automatically become law.' The committee said it 'does not agree with this and asked the Minister of Finance to remove that clause in the next round of changes.'
The PSCU echoed this criticism. 'This is a dangerous loophole. The PSCU unequivocally rejects the clause that allows benefit changes to pass automatically if Parliament procrastinates,' said Tahir Maepa, a PSCU representative. 'This is a betrayal of workers' trust. Pensions are a lifelong commitment, not a policy loophole that can be manipulated without due regard.'
While cautiously supporting the Bill's intention to place pensions directly on the NRF, Maepa warned: 'We conditionally support placing pensions and post-retirement benefits on the NRF, as it should address delays and underfunding. However, we caution the government that this cannot be used as an excuse to freeze wages, reduce job opportunities, or privatise services. Workers' deferred wages must be legally protected from austerity measures.'
He added that the Bill's success depends on firm guarantees. 'The Bill's promise of efficiency is meaningless without penalties for late payments to retirees; a union seat at the table to monitor the implementation of the Bill; and strong anti-cut protections embedded in the law itself.'
'If the government disregards our concerns, we will mobilise our members and challenge this Bill in every forum, including courts, public spaces, and Parliament,' Maepa said.
THE MERCURY