MBABANE – Labour and Social Security Minister Phila Buthelezi says company closures and retrenchments are part of global economic realities but government is prepared to manage their impact on the workforce.
Speaking on current concerns around job security, Buthelezi noted that such occurrences were anticipated in actuarial studies and that the latest assessments show a positive outlook for the viability of the country’s pension scheme.
The minister’s remarks come at a time when the Labour Force Survey 2023 reports high unemployment and labour underutilisation, particularly among young people aged 15 to 35.
Meanwhile, international pension expert Max Horlick has traced the challenges facing both public and private pension systems back to global economic instability dating from the oil crises of the 1970s. Horlick, who previously worked with the Social Security Administration’s Office of International Policy, said that before the crises private and public pension schemes largely operated separately, with little incentive for integration.
He explained that economic shocks, rising unemployment and mounting fiscal pressures on governments forced a rethink of how retirement benefits should be structured. According to Horlick, austerity measures that cut state-funded pensions and threatened tax incentives for private contributions left many citizens with fewer retirement guarantees, even as expectations for secure post-retirement incomes increased.
Horlick observed that employers also face tough choices, as pension contributions compete with demands for higher wages and better working conditions. For many companies, especially during difficult economic cycles, sustaining pension benefits without state support can be financially demanding.
Public pension schemes are also under growing strain as governments battle deficits while being pushed to expand social protection to cover disability, severance, occupational injury and family leave. Horlick cautioned that reforms must be carefully phased in to avoid destabilising entitlements or creating abrupt social dislocations.
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