SPF would like to clarify the recent comments and discussions being made with regards to the Surviving Spouse Pension. SPF would like to point out that there have been a lot of uninformed comments. The pension is a “Pay-as-you-go system”, which means that what is paid as contributions is used to pay pensions. This means that today’s working generation pays for yesterday’s generation and the future generation will pay for today’s generation- “a solidarity between generations”. SPF has been able to accumulate surplus funds over the last ten years, because we had more working population to pay less retirees, resulting in excess funds which is why the investments are high.


However, in the near future, we can see the population change where we will have less working population-contributors and more retirees living longer, where SPF will need more funds, which is why an increase in contribution is being recommended.


Members make contributions through mandatory 4% of their pay, of which 2% is from the employer. They can also contribute additional amounts through Voluntary contributions, which are additional savings being made for retirement. For both these contributions, an annual interest is paid to the member accounts-this year being 3.5%.

A mandatory contribution assures members:

  1. A pension for life, which is adjusted to the cost of living each year
  2. An incapacity pension in the unforeseen medical instance of being unable to work
  3. A children’s pension up to 18 years or 25 years if in full time education
  4. A surviving spouse pension for life
  1. For the member
  • Pension for life

When a member of SPF retires, the pension being paid is an earning replacement, calculated based on a formula and is not entirely from their contributions made. As an example, a member who has a salary of around SCR 10,000 at the time of retirement, after working for 25 years, would have contributed around SCR 50,000 in total and would be entitled to a pension of around SCR 5437 per month for life. This excludes the Social Security Government pension of SCR 5050. A simple calculation would reveal that in 10 months, the pensioner would have exhausted all the contributions made throughout the member’s working career. And yet SPF will continue to pay the pensioner for life.

  • Incapacity pension

This is to cover loss of earnings of a member if found medically unfit to work.

  1. For the member’s dependents:
  • Children’s pension is another assistance being given to the deceased members’ under-aged children or in an educational institution, because they were dependents of the deceased.
  • Surviving spouse

The pension is primarily aimed to provide financial support or otherwise, to the deceased members’ surviving spouse to maintain the household, had the member been alive. A surviving spouse is defined as being the legally married partner living with and being maintained by the deceased members, prior to their death, or in co-habitation with and being maintained by the deceased members for at least three years prior to their death. To note that it is the deceased members’ choice of spouse, whether legally married or not, at the time of death, that is to be respected. If deceased members had no spouse, or children up to 18 years or upto 25 years in full time education, then the contribution amount made by the deceased members, is refunded in a lump sum to the nominated beneficiaries that may include adult children, or in the absence of a nomination, the heirs of the deceased under the Civil Code.

Today SPF has 181 widowers who are benefitting the surviving spouse pension, and includes single mothers and fathers, housewives with children and those who have been dependents of the deceased member. SPF does not retain anyone’s contributions at any time. If a member does not qualify for a pension, the full amount contributed with interest is refunded to the members or their dependents.

Since SPF assures and guarantees a pension for life to all its members, additional income other than contributions is a must, which comes through all of SPF’s investments. SPF has to ensure that it is well funded and is sustainable at all times.