Govt says proposal in pipeline to bring back early retirement for public servants

JOHANNESBURG - In a bid to rein in runaway public spending, government said a proposal is in the pipeline to bring back early retirement for public servants.

Finance Minister Enoch Godongwana teased the proposal in his Medium-Term Budget Policy Statement (MTBPS) at the National Assembly on Wednesday.

While further details are expected in the February budget, this means public servants aged 55 to 59 will be able to apply for early retirement without a reduction of pension benefits.

With the exception of Iceland and Denmark, South Africa’s average spending on public sector salaries is well above many countries.

The public sector wage bill is one of SA's biggest expenditure items, currently accounting for a third of spending.

READ: MTBPS 2024: Godongwana reveals 'pro-growth agenda' focused on stability of public finances

Cabinet has now approved an early retirement programme to reduce government employment costs while retaining critical skills and promoting entry of younger talent into the public service.

While it would be voluntary, Godongwana said R11 billion will be earmarked to incentivise public servants over the next two fiscal years.

READ: Windfall from two-pot withdrawals not enough to plug tax revenue collection shortfall - SARS

Once implemented, it would save the fiscus at least R2 billion a year.

"This is part of building a capable, ethical, and developmental government," said Godongwana. 

In 2019, the Department of Public Service and Administration implemented a similar initiative for a six-month window.