FIMA raises the stakes for retirement fund trustees
For many employees, being nominated or elected as a trustee of a retirement fund is regarded as an honour. And rightly so. Trustees are entrusted with safeguarding employees' retirement savings, often accumulated over decades and intended to support members and their families long after their working lives have ended.
Under Namibia's Financial Institutions and Markets Act, 2021 (FIMA), however, trusteeship is no longer merely a governance role grounded in broad fiduciary principles. It is now a position with clearly defined statutory duties, responsibilities and penalties for non-compliance.
Under the repealed Pension Funds Act, obligations were often framed in terms of the responsibilities of "every registered fund". FIMA deliberately shifts that focus to "the board of a registered fund" and, in some instances, directly to board members and officers. The change is significant. It reflects a clear legislative intention to place accountability on those responsible for the governance and oversight of retirement funds.
While a retirement fund remains a separate legal entity, board members may, depending on the circumstances, face both collective and personal liability for failures to comply with the Act.
This should not deter individuals from serving as trustees. Rather, it underscores the seriousness of the role. Trustees oversee contributions, investments, governance, compliance, benefit payments and the protection of members' rights. In many respects, they hold the financial futures of employees and pensioners in their hands.
The principal officer’s role
One notable change under FIMA concerns the role of the principal officer. Section 260 requires every registered fund to appoint a principal officer and notify NAMFISA within the prescribed period. Failure to do so may result in significant penalties, including fines and imprisonment.
The Act also provides that the principal officer must serve as an ex officio member of the board, although not as chairperson. This marks an important governance development from the previous legislative framework, where the principal officer's role was not as explicitly integrated into board structures.
Section 261 further strengthens accountability. Trustees who become aware of any material matter that could seriously prejudice the financial soundness of a fund, or the rights and benefits of members, are required to notify NAMFISA in writing. The duty is proactive rather than passive. Trustees are expected to remain vigilant, informed and responsive to risks affecting members' interests.
FIMA also places greater emphasis on transparency and ethical governance. Under Section 264, board members must disclose to NAMFISA any payments or other benefits received directly or indirectly from the fund or from contractors associated with it. Failure to comply may attract severe penalties.
Trustee duties
The general duties of trustees are set out in Section 265. These include ensuring proper record-keeping, the accurate administration of contributions and benefits, prudent investment of fund assets, effective risk management, appropriate communication with members and employers, and compliance with applicable laws.
Trustees must also ensure that contributions are paid on time, obtain expert advice when necessary, meet regularly as a board and continuously assess whether board members remain fit and proper to hold office. Collectively, these requirements reflect the standards expected of modern retirement fund governance and reinforce the need for diligence, skill and care.
Actuarial oversight receives particular attention. Section 268 requires boards to ensure that valuation reports are submitted to NAMFISA within 180 days of the valuation date and that employers receive copies or summaries of those reports. The provision reinforces the importance of maintaining both the financial soundness and transparency of retirement funds.
Section 269 contains some of the most severe sanctions in the chapter. It prohibits a registered fund or its board from conducting business other than that of a retirement fund. The provision is intended to preserve the integrity of retirement funds and prevent the misuse of pension assets and structures.
Members’ rights to information
FIMA also strengthens members' rights to information. Sections 271 and 272 require that members receive copies of fund rules and amendments free of charge. Section 281 expands access further by allowing members to obtain financial statements, valuation reports and other prescribed documents.
Trustees and boards are therefore expected to treat transparency and accountability as core governance responsibilities rather than administrative formalities.
Trusteeship under FIMA increasingly demands competence, integrity, independence and ongoing suitability for office.
Ultimately, the purpose of these provisions is not to discourage individuals from serving as trustees. Retirement funds require committed, capable and ethical individuals who are willing to act in the best interests of members.
FIMA nevertheless makes it clear that trusteeship is an onerous legal responsibility that requires preparation, understanding and continuous oversight. Whether you are a current trustee, an employee considering nomination to a board, or an employer-appointed trustee receiving that appointment letter for the first time, it is essential to understand the legal obligations that accompany the role.
Trusteeship under FIMA is no longer simply about representation. It is about accountability, governance and the protection of the retirement security of others.
* Vincent Shimutwikeni is a retirement funds author and pension industry professional.
