Why was I penalised on my pension after taking up the early retirement offer from the DPSA in 2019?

The long answer

Unfortunately, at the time you applied for early retirement in August 2019, the early retirement without penalties was not yet in force. The policy was only approved by a special cabinet meeting on 10 April 2024.

The Department of Public Service and Administration (DPSA) policy had proposed that eligible persons aged 55 to 59 could apply to retire without pension penalties, and employees aged 60 to 63 could apply for “voluntary earlier exit”, which is normal retirement with a financial incentive based on years of service.

On 10 October 2025, the DPSA put out a Circular 38 approving an extra financial incentive for workers between the ages of 55 and 59, calculated at two (2) weeks' basic salary annually for the first twenty (20) years of pensionable service, and one (1) week's financial incentive for each consecutive year of pensionable service after that.

An eligible person could only apply for the DPSA’s Incentivised Early Retirement Programme (ERP) from 15 October 2025, and the closing date is 30 November 2025. The first phase of this ERP is from 1 October 2025 to 31 March 2026, with a second phase planned for the following financial year. 

The DPSA circular said that in terms of the Public Service Act, every Executive Authority (EA) had the right to approve or decline applications for early retirement without pension penalties. That means that a request had to go through the Human Resources (HR) department first and then be approved or declined by the EA.

The specific application form was available from the Department of Public Service and Administration, and had to be submitted together with a letter of approval from the HR department and a certified copy of one’s ID.

So what can you do? Usually, you can withdraw an application through your HR department within a short period like 30 days, but only before it has been approved by the Executive Authority. But you are years past that deadline. 

It may be worth making a sworn affidavit explaining that you mistakenly applied for ERP without pension penalties, not understanding that it was not yet available. You could submit this to your previous employer and ask if there is any way they can assist you to withdraw or cancel your premature request, as your mistake has impacted your pension benefits. (The standard rules for early retirement usually involve a significant reduction/penalty in pension benefits, like 0.33% for each month before the age of 60).

You could also contact The Black Sash, and ask for their advice and assistance. These are their contact details:

• Black Sash

Email: help@blacksash.org.za and info@blacksash.org.za

Tel (national office): 021 686 6952

Helpline: 072 66 33 73, 072 633 3739 or 063 610 1865

Wishing you the best,
Athalie