Awareness of living expenses after retirement for Lesotho public servants

Abstract

The main objective of the study was to analyse the Lesotho public servants’ awareness of living expenses after retirement. The secondary objectives were to determine if Lesotho public servants engaged in financial planning, take retirement risks into consideration when planning for their retirement and the degree of their engagement with the Public Officers’ Defined Contribution Pension Fund. In the research, the epistemology assumption followed is objectivism while the ontology assumption followed is positivism. Quantitative data was collected by means of a structured questionnaire presented in English to a sample of 408 public servants formulated from 24 Lesotho government ministries using stratified random sampling and simple random sampling. The research revealed that the majority of public servants aged 50 years and younger will have to work during their retirement to supplement their retirement income, while most public servants do not have other pension and investment funds to supplement their retirement income. Furthermore, Lesotho public servants do not wish to downsize their residential homes when they retire and very few public servants will carry substantial debts into retirement. The research concluded that since almost all public servants who have to work in retirement to supplement their income wish to join the business sector, public servants must be made aware of and be equipped with business development and business management skills. The employer must also accept the responsibility of educating the public servants about different employment options in retirement. Public servants should be encouraged to acquire specialist skills that require experience which will make them more competitive than younger workers in the future. Most importantly, the research established that a substantial percentage of public servants do not review their pension plan statements because they do not understand the terms of the Public Officers’ Defined Contribution Pension Fund. This hinders the public servants’ ability to make proper retirement provisions. The employer should organise a team composed of human resources management benefits specialists to educate the public servants on their pension plans and to facilitate the provision of timely statements.