Skip to main content

PENSION FUNDS AUSTERITY DRIVEN BUSINESS MODEL IN THE SPOTLIGHT AS LIKHWANE SAGA RAGES ON

Picture sourced from the internet

Written by Fundizwi Sikhondze

The raging saga involving the  beneficiaries of the Eswatini Electricity Company Pensions Fund (EECPF), who have been fighting the EECPF in order to get the payment of benefits due to their dependants resumed, has shone the spotlight on the practices of pension funds in the country. This episode has perhaps revealed legislative weaknesses particularly legislation in relation to the protection of pension funds beneficiaries as well as a poor oversight exercised by the Financial Services Regulatory Authority (FSRA) over what can be described as risky practices of pension funds in the country.

The background of this particular case is that it appears that Likhwane received funds from the different pension and provident funds and proceeded to invest the funds in investment vehicles such as ESW/Escponet Investment and Lingedla PTY LTD. From these funds, in the case of the EECPF, it appears , Likhwane was expected to facilitate the payment to beneficiaries of deceased members of the pension fund.  Likhwane from its own website presents itself to have provided beneficiary funds administration and tracing services and their board chairperson was reported to be respected former Conciliation Mediation and Arbitration Commission (CMAC) former Managing Director Nathi Gumede.  

While the guardians of the EECPF beneficiaries were fighting for the resumption of payments of their dependents' benefits, after they were stopped in June 2023 by Likhwane, there was also a court process   between Likhwane ,the FSRA and the concerned pension and provident funds. From media reports it appears that on 24th August 2023 the FRSA had been granted an ex parte court order to begin the process to liquidate Likhwane. The order is now being challenged by concerned pension/provident fund  including Eswatini Revenue Services Provident Fund, Eswatini Bank Pensions Fund, Umfuso Umbrella Fund, Eswatini National Provident Fund Pension Fund and Eswatini Sugar Association Staff Pension Fund , Civil Aviation Authority Provident Fund according to the daily newspaper the Times of Eswatini (13.10.23).

From the court process these pensions/provident funds are perhaps hoping to salvage some funds for from the operating accounts of Likhwane rather than to wait for the finalisation of the liquidation process.  

Beneficiaries protection 

The case of Likhwane and the EECPF appears to be a serious case of outsourcing of the core operational responsibilities of the pension/provident fund to a third party. The function to pay beneficiaries of a deceased member of a pension/provident fund is one of its core duties and it is baffling to many experts as to why these pension funds such as the EECPF ended up giving away this function to a third party like Likhwane in the first place. 

Experts contacted by this publication but who wanted to remain anonymous pointed out that even amidst these challenges brought by the troubles facing Likhwane, the pension/provident funds concerned ought to still find means to continue to honour their commitments to the beneficiaries of their pension/provident fund.  

It is only a hope for the sake of vulnerable beneficiaries that this serves as a valuable lesson for the industry and that legislation to protect the beneficiaries will be strengthened to prevent any similar episodes in the future.

Comments

Post a Comment

Popular posts from this blog

SNAT PRESIDENT MBONGWA DLAMININ HAS BEEN FIRED BY THE ESWATINI GOVERMENT

Picture: SNAT President Mbongwa Dlamini (Image courtesy of SNAT platform) As of Wednesday 30th September 2023 the President of the Swaziland National Association of Teachers (SNAT) Mbongwa Ernest Dlamini (pictured above) has been fired by the Teaching Services Commission (TSC) of the Ministry of Education on behalf of the Government of Eswatini. These news were announced by the SNAT Secretary General Lot Gadaffi Vilakati in the morning of the 30th August 2023 in Mbabane.  Comrade Lot announced the unfortunate news to scores of workers that had gathered  at the Ministry of Public Service office block for a protest organised by the Swaziland Democratic Nurses Union (SWADNU) to decry the shortage of health workers and key medicines in the public health system in Mbabane. Secretary General Lot added that SNAT will stick with the president through and through and that if the government was fatally mistaken if they thought president Mbongwa would be discarded or disowned by SNAT now that he
Post a Comment
Read more

ATUSWA'S WANDER MKHONZA CALLS FOR MORE ATTENTION ON SWAZILAND

ATUSWA Secretary General Comrade Wander Mkhonza addressing the IndustriALL Mid Term Policy Conference in Capetown ,South Africa (Picture courtesy of IndustriALL) Written by Fundizwi Sikhondze  The Amalgamated Trade Union of Swaziland (ATUSWA) Secretary General Comrade Wander Mkhonza ,on Tuesday 20th June 2023, addressed the midterm policy conference of the IndustriALL Global Union currently sitting in Cape Town, South Africa where he called for more attention to be bestowed to the repressed workers in Swaziland by the global union. ATUSWA together with the Swaziland Electricity Supply and Maintenance Workers Union (SESMAWU) are the two Swaziland affiliates of the IndustriALL Global Union. Secretary General Wander drew the conference's attention to the repression that workers face in Swaziland through state repression as well as through the courts. He credited the notorious 1973 decree as the source of the repression in the country to the extent that even when laws are crafted an es
Post a Comment
Read more

NAPSAWU HAS SUSPENDED THREE NATIONAL OFFICE BEARERS

Written by Staff Reporter The National Public Service and Allied Workers Union (NAPSAWU) National General Council (NGC) ,on Thursday 15 th February 2024, suspended three of its National Office Bearers (NOBs), two of whom are believed to be principal officers. Principal Officers number up to three in trade unions and are the President, General Secretary and the Treasurer. The suspension of two of them may therefore demonstrate the seriousness of the matter just barely six months since the current NOBS took office in August 2023. The suspension of the trio is reported to have come after it had been discovered that they were one way or another involved in alleged misappropriation of undisclosed NAPSAWU funds believed to  amounting to more than one hundred thousand and seventy thousands (more than E170 000) emalangeni. The funds according to reliable sources are believed to have been approved funds for union activities but were later discovered to have been diverted into personal acco
Post a Comment
Read more