By Own Correspondent
The proposed conversion of the Eswatini National Provident Fund (ENPF) into a universal, two-tiered national pension scheme has stirred hope among contract teachers who have long laboured without pension security. For decades, these educators have stood at the chalkboard shaping young minds, but many have faced the bitter reality of retiring with no pension benefits.
Now, with the Eswatini National Pension Bill, 2025, before Parliament, the transition promises not just a change on paper, but the possibility of retirement dignity for those who otherwise would have none.
“The conversion is making us happy because for some years many contract teachers have been working, and some of them reach retirement age, and you find that they get nothing at all, yet those who are permanent go home with something,” said Oswald Simelane, in an interview recently. Simelane is a contract teacher at Mlindzini High School.
The Contract Teacher’s Dilemma
It is common cause that some teachers remain on contract for an extended period, in some cases over a decade. This has serious implications for their retirement outcome, since they are not members of the Public Service Pension Fund (PSPF) while working on contracts.
An actuary consulted for this report explained that a reform is crucial because teachers who remain on contract for longer can lose out significantly on retirement benefits, even if they started at the same time and with the same qualifications as their permanent counterparts.
An actuary is a professional who uses advanced mathematical, statistical, and financial skills to assess and manage risk and uncertainty. They analyse data to predict the likelihood and financial impact of future events, such as accidents, death, or natural disasters.
Actuaries are crucial in the insurance and pension industries, where they design financially sound policies and plans, determine premiums and contributions, and ensure that funds are sufficient to cover future payments.
They help organisations make strategic decisions and are involved in areas like enterprise risk management, investments, and data science. In essence, they are “risk management experts” who help businesses and individuals plan for an uncertain future.
How the conversion will impact Contract teachers’ retirement outcome
Teachers who remain on a contract for an extended period, sometimes for more than a decade, face significant negative impacts on their retirement benefits. Unlike their permanent counterparts, contract teachers are not members of the PSPF. This exclusion means they lose out on crucial contributions and investment growth over their years of service.
Our analysis shows a stark contrast in retirement outcomes for two teachers employed at the same age (23.5 years). If one becomes permanent just two years into their career while the other remains a contract teacher for 11 years before being converted, their final retirement benefits can differ by nearly 35%.
This significant gap highlights how delayed conversion to permanent status can substantially diminish a teacher’s long-term financial security in retirement.
Against this background, let us consider the following teachers:
Table A: Current Retirement Gap
| Teacher 1 | Teacher 2 | |
| Employment Date | 01 January 2017 | 01 January 2017 |
| Permanent Employment | 01 January 2028 | 01 January 2019 |
| Date of Birth | 01 July 1993 | 01 July 1993 |
In the scenario presented in Table A, two teachers, both employed at 23.5 years old, will retire at the end of July 2053, completing approximately 36.58 years of employment. However, their pensionable service will differ significantly. Teacher 1 will have a pensionable service of about 25.58 years, while Teacher 2 will have a longer pensionable service of about 34.58 years, despite both having a total worked life of 36.58 years.
This difference in pensionable service leads to a substantial disparity in retirement benefits. Using a final pensionable salary of E9, 000 (in current money terms) at retirement, Teacher 1’s full monthly pension from the PSPF would be around E4, 605, whereas Teacher 2 would receive E6, 225 per month. This results in a monthly pension difference of E1, 620, which is a significant 35% difference. Furthermore, if both teachers choose to commute 25% of their pension, the lump sum difference in current money terms at retirement would be approximately E72, 900.
The situation would be drastically different if the proposed conversion Bill is approved. Assuming an effective date of January 1, 2026, the Bill would impact the pensionable service for both teachers at retirement, bringing their service years much closer.
A Game-Changer: The Conversion
The situation changes dramatically with the approval of the conversion bill. Under this new model, all years spent as a contract teacher will count toward retirement benefits. Contributions will be split between the ENPF and the PSPF. If the bill is approved, both teachers’ pensionable service years at retirement will be as follows:
Table B: Pensionable Service Post-Conversion
| Teacher 1 | Teacher 2 | |
| Period on ENPF at retirement | 36.58 | 29.58 |
| PSPF service to conversion date | – | 7.00 |
| PSPF service post conversion date | 25.58 | 27.58 |
Working on the current ENPF capped salary of E4, 000 per month, the salaries in current money terms to calculate pension at retirement for both teachers can be summarised as follows:
Table C: Salary Basis for Pension
| Teacher 1 | Teacher 2 | |
| Current PSPF salary at retirement | E7, 000 | E7, 000 |
| Current ENPF salary at retirement | E4, 000 | E4, 000 |
| Current Salary (to conversion date service) | E9, 000 | E9, 000 |
The contribution model ensures that PSPF is not financially harmed, as revised benefits will be based on revised contributions. Importantly, members will not lose the benefits accrued under the old system.
Under the proposed model, as detailed in Table C, there will be a new split in contributions. This will allow for a monthly contribution of E400 to the ENPF. Before conversion, there would be a full contribution to the PSPF and none to the ENPF. After conversion, PSPF contributions will be reduced.
This new structure is designed to prevent any actuarial damage to the PSPF. The revised benefits for members will be based on a new salary that aligns with the net contributions received. This ensures that PSPF members won’t lose out on the period when their contributions were based on their full basic salary. The final pension will be the sum of the pensions accrued under each salary listed in Table C.
Based on this, the resulting pensions for the example teachers will be as follows:
Table D: Retirement Outcomes with Conversion
| Teacher 1 | Teacher 2 | |
| PSPF Pension | E3, 582 | E5, 122 |
| ENPF Pension | E1,610 | E1, 302 |
| Total Pension | E1,610 | E6,423 |
Upon comparing Table D with the preceding paragraph, it is evident that the inclusion of the ENPF significantly improves the retirement outcomes for both teachers. This reform also helps to narrow the gap in retirement benefits, reducing the difference from approximately 35% to about 24%. This remaining gap is a result of the ENPF relying on capped salaries for both contributions and benefits. This change particularly benefits those working under contract, who stand to gain the most from this new system. The inclusion of civil servants into the ENPF, on the same terms as other members, will lead to improved retirement outcomes for everyone involved. This reform will even account for historical past service, which otherwise would not have contributed to an improved pension for members. This ensures a more comprehensive and secure retirement for all teachers involved.
Voices from the Chalkboard
For teachers like Simelane, the reform provides fairness and removes uncertainty, ensuring that their years of hard work and sacrifice are finally rewarded with a more secure retirement.
“The conversion is good as it will go a long way to fight poverty and ensure that the many years of sacrifice, hard work, and selfless contribution of contract teachers to educating our children are rewarded accordingly at the end of their working life. It removes uncertainty.”
Simelane’s wish is that the deductions remain affordable and sustainable for contract teachers, who are still paid less than their permanently employed colleagues. The ENPF has indicated that it welcomes suggestions and is open to engaging with and explaining the details of the proposed deductions.
His sentiment is echoed by Zodwa Dlamini, who worked for several years as a contract teacher after completing her BA at UNESWA. She was eventually made permanent but only after obtaining a teaching certificate at her own cost. By then, she had lost pensionable service for all the years she spent on contract.
“I was doing the same work as my colleagues, but because I was on contract, those years did not count. That is why this reform matters so much — it makes our contribution visible.”
The Broader Picture
The plight of contract teachers reflects a wider challenge. Many professionals in Eswatini, from domestic workers to farm labourers, have historically been excluded from pension coverage. The ENPF conversion aims to change that.
At a recent Montigny Financial Wellness Fair, Mkhululi Dlamini shared a cautionary tale, explaining that his relative cashed out his retirement savings in a lump sum to start a business, but the money was gone within a year, leaving him dependent on his children and stripping him of his dignity.
“My relative cashed out his retirement savings as a lump sum and used it to start a business. Within a year, the money was gone. Today, he survives only because of his children. That experience showed me the danger of lump sums. They vanish and so does your dignity,” Dlamini said.
While Mkhululi’s story highlights the personal tragedy of a lump sum payment disappearing, Mduduzi Dlamini echoed a similar sentiment, emphasising the emotional toll of financial insecurity. “Too many of our elders fall into depression when the money runs out,” he stated. “A monthly pension will ensure consistent support and remove that fear. This is the best decision ENPF has ever made.”
The Government has strongly backed the ENPF conversion, with the Prime Minister describing it as a reform that will cover both formal and informal sector workers, ending decades of exclusion.
His Excellency the Right Honourable Prime Minister Russell Mmiso Dlamini has publicly stated His Majesty’s Government’s support for the ENPF conversion. He described the reform as a “bold but necessary step to tackle poverty” and a way to provide a “dignified future for every liSwati.” He emphasised that the government’s position is not to force a single pension arrangement but to create an “extra layer of protection” for public servants by allowing them to diversify their retirement options.
Premier Dlamini mentioned that the government is confident in ENPF’s ability to manage the transition and that the reform is about “protecting livelihoods, reducing poverty, and securing a dignified future for every liSwati.”
Members of the public who were interviewed also reinforced the urgency of the conversion.
“There is no national pension scheme for old people. We request the authorities to act with urgency, because too many workers, including contract and informal, do not have the luxury of a pension scheme,” said Sipho Mnisi, of Matsapha
A Decade in Limbo: Oswald’s Story
For a decade, Oswald Simelane stood at the front of classrooms as a contract teacher, shaping young emaSwati. His dedication never wavered. But as retirement loomed, one reality weighed heavily: unlike his permanent colleagues, he would leave with nothing.
Now, with the proposed Bill, his years of service could finally count.
“This reform is a lifeline. It tells us that our years were not wasted.”
How Contract Teachers will benefit from the conversion
The proposed conversion brings tangible gains for contract teachers:
• Guaranteed monthly pensions rather than one-off lump sums.
• Recognition of contract years, ensuring service is not erased.
• Survivor benefits for spouses and dependents.
• Reduced poverty risk among elderly contract workers.
• Peace of mind — the certainty of support in old age.
Protecting Pension Rights from Casual to Permanent Employment
According to ENPF, the proposed legislation directly addresses a critical gap in the current system, which disadvantages a significant number of government employees. As it stands, individuals who work for the government for extended periods as casual or short-term contract employees do not accrue pensionable service under the PSPF during this time. Consider the following scenario where an individual works for the government for 10 years on a short-term contract before being converted to a permanent and pensionable position. Under the current PSPF rules, these 10 years do not count toward their pensionable service. They would only begin to accrue pension benefits from the date of their permanent employment. Under the new two-tiered system, this is no longer an issue. The employee would be a member of the National Pension Fund during their entire 30-year career (10 years as a contract employee and 20 years as a permanent employee). At the same time, they would also accrue 20 years of service with the PSPF. This dual-membership structure eliminates the “double jeopardy” of losing out on pensionable years.
At retirement, this individual would:
• Receive a pension from the National Pension Fund based on their full 30 years of contributions.
• Receive a pension from the PSPF based on their 20 years of service.
This framework ensures that all years of economically active life are protected, making the individual demonstrably better off.
From Hope to Reality
The conversion of ENPF into a national pension scheme is not just a bureaucratic shift. It is a matter of justice for thousands of contract teachers and other excluded workers. The analysis shows clearly that retirement outcomes improve with conversion, narrowing the gap between contract and permanent teachers, and providing more secure futures for all.
As the actuary put it, this reform does not weaken PSPF. It strengthens the entire system by adding a universal safety net. For contract teachers, the difference is life-changing.
For Hlengiwe Matsebula, a domestic worker who spoke of retiring with dignity, and for teachers like Simelane and Zodwa, this reform is not abstract policy. It is hope made real.