Billions allocated to settle BDF pension claims

The government commissioned an actuarial study in 2017 to assess the adequacy of pension payouts for Botswana Defence Force (BDF) personnel.

Minister for State President, Defence and Security, Moeti Mohwasa, told Parliament that the analysis revealed shortcomings in the Defined Contribution Scheme, which failed to account for the impact of mandated early retirement on replacement ratios.

He explained that if the pension denominator ratio applied to military personnel had been adjusted in line with the public service in 1998, the correct denominator for the BDF should have shifted from n/600 to n/375 when the public service ratio was revised from n/720 to n/450.

In response to these findings, the government enhanced transfer values for BDF members still in service before 1 April 2001. A Statutory Instrument issued in March 2024 amended the BDF Act to effect the denominator adjustment to n/375.

To date, 9,972 military personnel have been identified as eligible for transfer value enhancement—comprising 5,560 separated members and 4,412 serving members. Payments began in July 2024, and by 6 February 2026, 3,599 separated members had been paid.

An additional 161 are currently being processed, leaving 1,800 separated members with calculated transfer values still outstanding. All serving members have had their records updated with recalculated values.

Mohwasa noted that the pace of payments is limited by funding availability. The government has so far disbursed BWP 1.4 billion to Fund Administrators (NMG), covering 3,760 claims.

A further P5 billion has been allocated for pensions and gratuities in the next financial year, primarily to settle recalculated transfer values for BDF members.

He emphasised that payments are being prioritised: all claims below P300,000 have been settled, and payments for those owed between P300,000 and P500,000 are underway.

The minister stressed that transfer value enhancements are governed strictly by pension legislation—including the Retirement Funds Act, Income Tax Superannuation, and BPOPF Fund Rules.

These laws stipulate that members may only commute all retirement benefits if, after a 50 percent lump sum payment, the remaining annuity is less than P20,000 per annum.

“The pension provisions are not discretionary and do not allow for waivers,” Mohwasa said.