BL Premium reports that thousands of public sector workers over the age of 60 are to be offered voluntary retrenchment as part of an effort by the government to cut its salary bill.
The decision to offer voluntary severance packages — the first such offer in 20 years — follows the conclusion of a new three-year wage agreement last week that bust the state budget by about R30bn. The consequence of this, said the Department of Public Service and Administration (DPSA) in a statement, was that measures to contain costs had to be taken. These would include: encouraging early retirement by topping up pension funds for those who took the package; reviewing the government’s performance management and incentive systems; and more effective management of allowances. The DPSA said on Wednesday it was too early to say how many jobs would be affected. Assuming a savings target of R30bn over the next three years, the government would need to cut salaries by R10bn a year, which would imply scaling down thousands of jobs. The cost-containment plan would, however, come at a cost as the government would need to pay upfront to top up pensions to the level retrenchees would have reached at retirement age. A proposal for voluntary retrenchment was tabled by the government in earlier rounds of the public sector wage talks, but removed after objections by trade unions.
- Read this report by Carol Paton in full at BL Premium (paywall access)
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