Justicia Shipena
Retirement funds must now pay interest to members when there are delays in transferring benefits or paying contributions under new rules introduced through the Financial Institutions and Markets Act 2021 (Fima).
The regulations were published in the government gazette on 30 April and came into effect on 1 May.
Under the new rules, pension and retirement funds must pay interest if a member’s benefits are not transferred within 60 days after a request.
The interest is calculated daily and linked to the Bank of Namibia (BoN) repo rate, with an added margin. Last week, BoN kept its repo rate at 6.5%.
This means members must be compensated if their savings are delayed when moving between funds.
The regulations also require employers to pay retirement contributions on time. If payments are late, interest will be charged for the full period of delay.
Both the employer and its directors can be held liable for unpaid contributions and the interest. The total interest charged cannot exceed the original amount owed, and any interest collected must be paid into the member’s account.
Finance minister Ericah Shafudah said the new legislation strengthens oversight and improves outcomes for members.
She approved the start of the act and its regulations, which also bring changes across insurance, financial markets and medical aid funds.
Fima replaces the Pension Funds Act of 1956 and sets new standards for financial markets, including stricter rules for money market instruments and penalties of up to N$5 million for non-compliance.
It also sets rules for how surplus funds in retirement schemes are shared, requiring approval from the Namibia Financial Institutions Supervisory Authority (Namfisa) and ensuring members are informed.
In the insurance sector, the rules cover micro-insurance products, set limits on benefits, and require fair pricing.
They also introduce safeguards in health-related insurance, including limits on waiting periods and restrictions on policy cancellations based on health status.
Shafudah had approved the act in November last year, excluding the pension preservation rule that allows access to 25% of savings before retirement. That part was rejected after objections.
Fima replaces the Pension Funds Act of 1956 and is set to regulate non-banking financial institutions under Namfisa.
Trade unions welcomed parts of the act but raised concerns about oversight and implementation.
The secretary general of the Trade Union Congress of Namibia (Tucna), Mahongora Kavihuha, said the union’s main concern was the pension preservation issue, which has not been implemented.
“As far as we are concerned, we are happy that the preservation has not formed part of the implementation,” he told the Windhoek Observer on Tuesday.
Kavihuha said unions are still consulting and have prepared a report on the issue.
“There is a report that we produced that needs to be tabled on the preservation issues,” he said.
He said workers need to be informed about their rights.
“We need to ensure that workers, especially members and investors in pension funds, are properly informed about their rights,” he said.
Kavihuha called on Namfisa to improve awareness.
“Namfisa must develop a programme that will inform workers about their rights when it comes to pension funds,” he said.
He also raised concerns about oversight of the Government Institutions Pension Fund (GIPF).
“It looks like GIPF is operating in its own space where there are no rules, and we hear nothing from Namfisa on GIPF behaviour,” he said.
Kavihuha said the union will request a meeting with Namfisa’s leadership next week.
“We are requesting to meet the CEO of Namfisa for him to clarify these issues to us and for us to put our position forward,” he said.
He said lack of clarity could affect confidence.
“When regulations are introduced without proper explanation, we have a problem,” he said.
Kavihuha said unions want the regulations to be understood and applied in a way that protects workers.
“We want to ensure that all the regulations that came into effect on the first of May are fully implemented and understood by us as the owners and investors of pension funds,” he said.
Ramon Hansen, principal officer of Orion Namibia Pension and Provident Funds, also welcomed the changes.
“Fima holds the promise to our members that their retirement savings are safeguarded under the highest standards of governance and transparency,” he said.
Hansen said the framework also encourages members to stay involved.
“While Fima strengthens the regulatory framework, it also empowers members to play an active role in their retirement journey. Staying informed, monitoring contributions, and engaging with the fund are key to ensuring the best possible outcomes,” he said.
He said the fund will support the transition.
“We remain committed to ensuring a smooth transition as Fima is implemented and will continue to communicate openly with our members and participating employers,” he said.
Hansen said the law strengthens the system.
“Fima is not just a regulatory change; it is a meaningful advancement toward a stronger, more resilient retirement system for all Namibians,” he said.
