Fin24 reports that as it looks to rein in public sector wage costs, National Treasury has named the Department of Defence and the Department of Correctional Services as government departments that could be targeted with early retirement packages.

The retirement package is expected to incentivise public sector employees over 55 to take early retirement and introduce younger employees into the public service.   According to budget documents, this will include provisions of R4.4 billion in 2025/2026 and R6.6 billion in 2026/2027. Treasury director-general Duncan Pieterse said on Wednesday that there would be engagements with departments "which are more personnel-intensive than others" to introduce the retirement packages when the funds become available to departments from 1 April onwards. "There are certain departments that are more personnel-intensive than others and that have had problems with their budgets for their compensation of employees' budgets. Two good examples of these are the Department of Correctional Services and the Department of Defence," Pieterse indicated. Up to 30,000 employees are expected to opt for early retirement, according to Treasury. Pieterse indicated, however, that some departments were subject to the Public Service Act and for those departments to access the early retirement packages, “a bargaining process must be concluded, which is under way. But some are not, like defence, which means they can go ahead.” Meanwhile, Finance Minister Enoch Godongwana said during his budget speech that savings would amount to R7.1 billion per year if the retirement packages were implemented.

• Read the full original of the report in the above regard by Na'ilah Ebrahim at Fin24 (subscription or trial registration required)

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