Mildred Oliphant. Picture: TREVOR SAMSON
Mildred Oliphant. Picture: TREVOR SAMSON

Former labour minister Mildred Oliphant has become the latest former cabinet member to resign as an MP.

Other former cabinet members who have resigned from parliament in recent weeks after failing to make it to President Cyril Ramaphosa’s new cabinet include erstwhile energy minister Jeff Radebe; Siyabonga Cwele who previously served as home affairs minister; former tourism minister Derek Hanekom; Nomaindia Mfeketo who was previously human settlements minister; former minister of state security Dipuo Letsatsi-Duba; former social development minister Susan Shabangu; former minister of sports and recreation Tokozile Xasa; and former minister of women in the presidency Bathabile Dlamini.

Some of the former cabinet members who have stepped down from parliament stated that they were doing so to preserve their pensions. 

However, the Political Office-Bearers’ Pension Fund is largely a defined contribution arrangement which in other words means that a member’s accrued retirement savings in the fund are not affected or reduced when a member moves from higher office to that of an ordinary MP. However, salary and therefore future contributions to the fund do reduce.

In essence, what this means is that the former cabinet members might have more to lose financially by choosing to resign as MPs.

However, what could make it attractive for long-serving cabinet members to resign is a 2008 presidential proclamation providing for payment of a one-off gratuity by the employer (not the fund) to ministers or deputy ministers who have served more than five years and whose terms have ended. This is equal to four months’ pensionable salary for every five years.

phakathib@businesslive.co.za