From August 2025 onwards, employees of the South African public service who work for the provincial or national departments will begin to retire at 65 instead of the retirement age of 60 that they have worked towards, for a long time. This change, which the DPSA has confirmed, marks an important step in lengthening working life and supporting institutional memory.
What Motivates This Change?
There were several important considerations that led to the change of policy. Longer service terms help public sector institutions to retain adept workers and fully utilise their skill sets. In addition, extending the period of active service has the potential of contributing to financial sustainability, as it delays the pension payout and lessens the burden on the Government Employees Pension Fund (GEPF). Support services and human resources systems are in the process of being modernised, and pension calculations have been revised to take the change into account.
Adjustments and Assistance from GEPF Regarding New Policies
The GEPF will update its actuarial calculations to take into account the extended contribution period and the delayed pension benefits. Employees’ monthly pensions will be recalculated to reflect their final salaries and the extended years of service. Early retirement options will continue to be offered, although the terms might be updated. Furthermore, to aid employees in navigating the new system, departments will be provided with retirement counseling and workshops.
Global Context: Following International Norms
The increase in the retirement age puts South Africa in line with many middle- and high-income countries where the retirement age for public employees is higher. For instance:
- Australia aims for 67 to 70 years;
- The United Kingdom is advancing towards 68 years;
- The United States has Social Security at 67 years.
Such changes are linked to the global trends in the reforms to the pension system that deal with the challenges of aging populations.
Implications for Staff
Employees who are approaching the end of their career should begin planning early. Depending on the particular transition rules, those reaching 60 right before August 1, 2025, may fall under the old rules. While the change improves incentives in terms of higher lifetime earnings and increased pension benefits, it also defers retirement and changes the career path. We expect departments to give clear instructions and individual counselling as part of this transition.
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