The Government Institutions Pension Fund (GIPF) has announced an increase in pension and disability income benefits. This includes a 5% income increase for active annuitants’ pension, comprising pensioners, spousal and child beneficiaries, effective 1 April 2024.
Pensions and disability income that have been in place for a year or more are eligible for a full 5% increase, and those that are under a year are eligible for a pro-rata increase, based on the number of months the pension has been in effect.
“The Board of Trustees took this decision after a thorough actuarial due diligence process and in consideration of various factors such as the inflation rate, cost of living and reasonable benefit expectations of its active annuitants, affordability on the part of the Fund, and the average annual return over the last five years, as well as the current and future liabilities and the assets of the Fund to ensure that the Fund’s assets can adequately cover its liabilities.
“Given the fact that returns on investments are volatile from year to year, the Fund has adopted a three-year averaging method for the GIPF, with the returns of each December year-end serving as a reference point,” reads a statement from the fund.
The statement continues that by awarding annual pension increments, the Fund considers creating a delicate balance by considering the volatile investment environment, global geo-political circumstances and the need to manage expectations regarding pension increases while ensuring active annuitants live reasonably within inflation parameters.
GIPF’s active annuitants stood at over 51 000 as at 19 February 2024.
“A pension increase serves to cushion pensioners from unexpected changes in their purchasing power, and hence the incessant ability to increase members’ benefits annually. The fund aims to match the Namibian Consumer Price Index (NCPI) to ensure pensioners retain their purchasing power over time, subject to affordability,” said Martin Inkumbi, GIPF CEO and principal officer.
Moreover, GIPF also announced an increase of 5% for all its members receiving a monthly disability income from the fund.
The increase stemmed from GIPF’s thorough actuarial due diligence process that indicated this group of members last received a disability income increment seven years ago.
“The Fund is committed to guarding and growing all members’ financial security, hence the increase in the disability income, which serves to cushion disabled members from unexpected changes in their purchasing power,” Inkumbi added.