AS the debate over moves to preserve pensions until the age of 55 continues, retirement funds are maintaining they do not support the regulation that could come into force on 1 October.
This follows the passing of the Financial Institutions and Markets Act of 2021 (Fima), endorsed by the Namibia Financial Institutions Supervisory Authority (Namfisa), which is envisaged to become operational on 1 October.
Fima will replace the current Pension Funds Act of 1956.
The issue revolves around regulation RF.R.5.10 under the new act, which deals with the preservation of retirement fund benefits.
In terms of this regulation, beneficiaries may only access 25% of their retirement benefit before they reach retirement age.
The remaining 75% would be paid out in monthly instalments upon retirement.
Alexander Forbes Namibia principal officer Klaus Laborn last week said it is incorrect to say that trustees are in support of the compulsory preservation regulation.
“No fund has been consulted on an individual basis on any draft standard or regulation,” he said.
He said if a person resigns or is retrenched or dismissed with an accumulated benefit balance of N$500 000, they would only be able to access N$125 000, and the rest would be preserved until they reach the age of 55 without any option of withdrawing money from their pension fund before then .
“The trustees have and always will continue to act in your best interest, and you are therefore cautioned not to make any hasty decisions regarding your retirement benefit. It’s best to await the outcome of the current consultative process,” Laborn said.
The Namibia Water Corporation (NamWater) retirement fund last week said although it has actively participated in the consultation process aroun Fima, the impression that trustees accepted the recommended preservation clause is incorrect.
Namibia University of Science and Technology (Nust) retirement fund principal officer Antoinette de Greeff says following Namfisa’s consultations with various representatives, the proposed compulsory preservation provisions were objected to.
“No fund was consulted on an individual basis in this regard,” De Greeff says.
Affirmative Repositioning (AR) leader Job Amupanda says given that employees have not been consulted, pension funds are “disowning” the regulations, and Namibians have not been presented with any “scientific evidence” that supports the assumption that preventing workers from accessing their pension savings would be to their benefit.
“It is clear that somewhere in dark corners a scheme is being hatched, and Fima was identified as the vehicle. It is clear that these gimmicks as regulations must fall,” Amupanda commented in an opinion article last week.
National Union of Namibian Workers (NUNW) secretary general Job Muniaro says it is “crucial, necessary and mandatory” to reject Fima.
He says it is not in the public interest to make comments on the draft regulations meant to administer an act with 405 pages and 467 sections which were crafted over a period of more than 10 years, while expecting the public to comment and make input in less than six months if the act is to be put into operation by 1 October.
“Based on our final analysis, NUNW calls for the rejection of Fima by all Namibian workers pending adequate and expensive consultations with all the affected and interested parties, as well as all stakeholders,” he says.
Muniaro says the union’s call is based on the fact that its members are expected to take care of their education and health as well as that of their children using their pension savings.
“As we are engaging Namfisa and the government on this matter, we call on our members to remain calm until such time we give them the necessary feedback on the final outcome of these engagements,” he says.
Minister of finance Iipumbu Shiimi has supported the move to implement Fima.