Two-pot pension system enters fray
Namibia Financial Institutions Supervisory Authority (Namfisa) CEO Kenneth Matomola has refused to be drawn into developments regarding a two-pot pension system, owing to fears that his comments may influence the outcome of work now being done to form an opinion.
Matomola’s remarks follow the recent introduction of the system in neighbouring South Africa. This comes as a technical committee has been set up to guide finance minister Ipumbu Shiimi on the Financial Institutions Markets Act (FIMA) around pension fund preservation rules, amid resistance to the implementation of the Act.
The two-pot retirement system enables you to access a small portion of your retirement savings before you retire for emergencies. The bulk of your savings will remain 'preserved', meaning you will have to keep the majority of your retirement savings invested until you retire.
“My views will be included once the task team has finalised that work and submitted a report to the minister. Since I am the registrar, I cannot express myself on the two-pot system because I am constrained and it might impact on the work that has to be done,” Matomola said.
Lawmakers back two-pot system
Lawmakers have, in the recent past, pushed for the introduction of the system, arguing that pension fund members should be allowed to enjoy the proceeds of their pensions while alive.
“It will just be right for people to have access to their money without repayment. My money, my business. No one will be forced to take it. People should always have a choice,” Popular Democratic Movement (PDM) lawmaker Elma Dienda was quoted as saying.
Swapo parliamentarian and chairperson of the parliamentary standing committee on economics and public administration Natangwe Ithete said Namibia should have had this system in place already.
“We must never be a country that follows what others do. It was not supposed to first happen in South Africa before we implemented it here. It should not be a habit where others lead and we follow,” he said in a report filed by The Namibian earlier this year.
Update on FIMA
Meanwhile, giving an update on FIMA, Matomola said the Act had been taken through extensive scrutiny owing to its slowed implementation. This follows concerns around the adoption of proposed pension preservation rules that would allow beneficiaries access to only 25% of their retirement benefits before they reach retirement age. The remaining 75% will be paid out in monthly instalments upon retirement.
The proposed preservation rules caused public uproar once they came to light.
“As it stands now, FIMA can only come into force once the minister says 'yes, let’s go ahead and implement'. Given what has happened, the minister said, 'okay, maybe there was no broad consultation on a legislation or subordinate legislation on pension benefits, or the preservation thereof',” Matomola said on the likely delay behind the adoption of the Act.
Matomola’s remarks follow the recent introduction of the system in neighbouring South Africa. This comes as a technical committee has been set up to guide finance minister Ipumbu Shiimi on the Financial Institutions Markets Act (FIMA) around pension fund preservation rules, amid resistance to the implementation of the Act.
The two-pot retirement system enables you to access a small portion of your retirement savings before you retire for emergencies. The bulk of your savings will remain 'preserved', meaning you will have to keep the majority of your retirement savings invested until you retire.
“My views will be included once the task team has finalised that work and submitted a report to the minister. Since I am the registrar, I cannot express myself on the two-pot system because I am constrained and it might impact on the work that has to be done,” Matomola said.
Lawmakers back two-pot system
Lawmakers have, in the recent past, pushed for the introduction of the system, arguing that pension fund members should be allowed to enjoy the proceeds of their pensions while alive.
“It will just be right for people to have access to their money without repayment. My money, my business. No one will be forced to take it. People should always have a choice,” Popular Democratic Movement (PDM) lawmaker Elma Dienda was quoted as saying.
Swapo parliamentarian and chairperson of the parliamentary standing committee on economics and public administration Natangwe Ithete said Namibia should have had this system in place already.
“We must never be a country that follows what others do. It was not supposed to first happen in South Africa before we implemented it here. It should not be a habit where others lead and we follow,” he said in a report filed by The Namibian earlier this year.
Update on FIMA
Meanwhile, giving an update on FIMA, Matomola said the Act had been taken through extensive scrutiny owing to its slowed implementation. This follows concerns around the adoption of proposed pension preservation rules that would allow beneficiaries access to only 25% of their retirement benefits before they reach retirement age. The remaining 75% will be paid out in monthly instalments upon retirement.
The proposed preservation rules caused public uproar once they came to light.
“As it stands now, FIMA can only come into force once the minister says 'yes, let’s go ahead and implement'. Given what has happened, the minister said, 'okay, maybe there was no broad consultation on a legislation or subordinate legislation on pension benefits, or the preservation thereof',” Matomola said on the likely delay behind the adoption of the Act.
