Mbabane – Finance Minister Neal Rijkeberg has defended the government’s decision to pay rent for its occupation of a building owned by the Public Service Pension Fund (PSPF), saying the arrangement could help reduce the fund’s funding gap and, ultimately, the burden on taxpayers.
The Minister was responding to concerns over the government paying rent to PSPF, with questions being raised on whether taxpayers’ money should be used to rent a building owned by a public institution.
Speaking on Eswatini TV’s Market View programme, the Minister said the rental arrangement should also be considered in light of PSPF’s financial position and its outstanding funding obligations.
He said PSPF was currently about 13% underfunded, with the fund estimated to be approximately 87.5 % funded.
According to the Minister, the government remains the guarantor for the unfunded portion of PSPF, meaning taxpayers could ultimately be responsible for the shortfall.
He said government’s rental payments to PSPF could therefore contribute towards closing the funding gap and reducing the financial burden that could eventually fall on taxpayers.
The Minister said he did not consider the arrangement a waste of public funds, arguing that PSPF was one of the institutions where government spending could have a broader financial benefit.
“If the government is going to be spending money anyway and maybe supporting an institution to actually make a bit of a profit, I don’t believe there’s too much wrong with supporting PSPF,” he said.
He also pointed to the condition of the building before the government occupied it, saying its refurbishment had helped improve the appearance of Mbabane.
He described the building as an eyesore and said having it restored was beneficial to the city and municipality.
The Minister said the rental agreement itself was a normal transaction and maintained that the government was not paying excessive rent.
He said the arrangement could assist PSPF in improving its funding position, while ensuring that the taxpayer does not ultimately have to finance pension obligations that should be met from the fund.
PSPF provides pension benefits to public servants, and the Minister said reducing its unfunded portion was important because the government remains responsible for the shortfall.
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