The Public Service Pensions Fund (PSPF) in Eswatini achieved a E632 million after-tax surplus for the quarter ended June. This represents a significant deviation from its budgeted E493 million, with a favourable variance of E139 million. The fund's performance was primarily driven by stronger-than-anticipated investment income and lower-than-budgeted administrative expenditure. Despite challenges such as lower revaluation gains and higher withholding tax expenses, the PSPF managed to maintain a surplus position.
The PSPF generated E658 million before tax during the quarter, from which E26 million was deducted as withholding tax, resulting in the E632 million surplus after tax. Investment income was the largest contributor to the fund's financial performance, amounting to E745 million. This was E117 million or 18.6 per cent above the quarterly budget benchmark of E628 million. The positive performance was attributed to income earned across the fund's domestic, South African, and offshore investment portfolios.
On the expenditure side, the PSPF recorded administration expenses of E51 million, which was E15.3 million or 23 per cent below the budgeted E66.3 million. Investment fees also remained below budget, amounting to E46 million compared to the projected E48.3 million. This resulted in a favourable variance of E2.3 million or 4.8 per cent. However, revaluation gains were significantly lower than expected, amounting to E53 million against a quarterly budget of E291 million.
The lower-than-budgeted revaluation gains were due to subdued appreciation across certain asset classes amid continued volatility in global financial markets. Additionally, withholding tax on foreign investment income exceeded expectations, amounting to E26 million against a budget of E15.3 million. This was an unfavourable variance of E10.7 million or 69.8 per cent above budget. The increased taxable foreign investment income primarily drove this.
During the quarter, the PSPF disbursed E458 million in pension and other benefit payments. This was E225 million below the budgeted E683 million. The payments catered to 26,091 pensioners and beneficiaries, comprising 11,821 principal pensioners and 14,270 dependants. Pension payments accounted for the largest portion of disbursements at E343 million, followed by E97 million in retirement lump-sum payments.
The PSPF processed 244 exits during the quarter, with 174 claims, representing approximately 71 per cent, paid within five days. Another 40 claims or 16 per cent were settled within 15 days, while 10 claims took up to 30 days. One claim took up to 60 days, two took up to 90 days, and 17 took as long as 120 days. The longer processing periods indicate the need for continued improvements in coordination and claims-processing timelines.
The PSPF's CEO, Masotja Vilakati, has overseen the implementation of various initiatives aimed at enhancing the fund's performance and service delivery. The fund's positive performance is a testament to the effectiveness of these initiatives. The PSPF continues to play a critical role in administering pension benefits for eligible public servants in Eswatini.
Key points
- The PSPF recorded a E632 million after-tax surplus in the quarter ended June, exceeding its budget by E139 million.
- Investment income was the largest contributor to the fund's financial performance, amounting to E745 million.
- The PSPF disbursed E458 million in pension and other benefit payments during the quarter, catering to 26,091 pensioners and beneficiaries.
