Axed cabinet ministers who swiftly resigned as MPs this week are due to pocket millions of rands on top of their pensions, thanks to a generous but little-known “gratuity” for their public service.
Peters and Joemat-Pettersson stand to pocket as much as R3.8-million each in addition to their general pension fund benefits, thanks to a “loss of office gratuity” paid out to any MP who has served longer than one term as a public representative.
In terms of the rules of the Political Office-Bearers’ Pension Fund, an MP who vacates office gets paid a gratuity of four months’ pensionable salary for every five years of service. The gratuity is listed as an extra benefit that is paid out by a legislature separately from the pension.
Peters and Joemat-Pettersson backdated their resignations from parliament to March 31, before their cabinet axing, when they were still earning around R191,000 a month, or R2.3-million a year. Had the resignations not been backdated, their gratuities would have been almost halved.
Their taxpayer-paid “tip” adds up, given that they have held public office since 1994.
It is unclear if the gratuity was the motive for the resignations.
Peters and Jonas could not be reached for comment.
However, sources close to Jonas said he resigned in protest at the ANC national working committee’s inaction against Zuma. Peters was quoted during the week as saying she resigned for health reasons.
Joemat-Pettersson was reluctant to speak. “I’m sorry, I’m busy right now, OK, bye,” she said before hanging up.
Jonas served two terms in the Eastern Cape legislature, from 1997 to 2004 and 2007 to 2009, before becoming deputy minister of finance in 2014. He earned R158,000 a month, or R1.9-million a year, as deputy minister. His resignation from parliament was also backdated to March 31.
Grace Boroto, an ANC MP who is chairwoman of the board of trustees for the Political Office-Bearers’ Pension Fund, declined to comment. “I can’t confirm that [as their reason for resigning as MPs]. Everybody has their own reasons. I’m sorry, I can’t comment on this one.”
I can’t confirm that [as their reason for resigning as MPs]. Everybody has their own reasons. I’m sorry, I can’t comment on this one
Erich Potgieter, an actuary for the pension fund, said the loss-of-office gratuity had been created to give “members who have been booted out by voters some bridging pay” after they left parliament.
Other MPs have previously argued that the gratuity was necessary to augment the pensions of MPs who arrived in parliament with no reserves in 1994, after spending most of their adult lives earning no salaries during the struggle.
But with older MPs serving multiple terms and younger MPs entering the national legislature having built up some pension elsewhere, coupled with a rising public-sector wage bill, there have been calls for the gratuity to be scrapped.
Potgieter said the Independent Commission for the Remuneration of Public Office Bearers, which sets out the salary and benefits of public office, was “relooking at the pensions dispensation for political office-bearers post-2019”. He said the gratuity was also being scrutinised.