The Namibia Financial Institutions Supervisory Authority (Namfisa) the domestic retirement fund industry had more than N$218 million unclaimed pension benefits by pensioners and their beneficiaries in 2023.
Although still a concerningly high number, this is a notable improvement from just more than N$229 million unclaimed in 2022.
It is in the interest of any pension fund provider to ensure benefits are claimed upon retirement by their members or indeed, in the event of death, by their family members, and more specifically the determined beneficiaries.
The Namibian Building Workers Pension Fund (NBWPF), an umbrella fund for the construction sector, historically had a relatively large number of unclaimed benefits.
One of the biggest challenges was that members who had left the fund had become untraceable, despite efforts taken to find them. Another fundamental reason was that some of the beneficiary forms had not been updated by respective members.
In this regard, the NBWPF decided to improve the administration of the fund. Accordingly, EPIA Financial Services, recently created by the NBWPF, is now in charge of handling all administrative activities of the fund. One of the main strategic actions was to get the records of their members, and where possible, previous members, up-to-date.
With more recent and accurate records, some unclaimed benefits have now been disbursed to beneficiaries, and future traceability is expected to be drastically improved.
“It is very important to us that the administrative foundation of EPIA Financial Services is very strong so that we can provide an excellent service to our stakeholders, and part of that is that benefits can be claimed and accessed very quickly,” said Enwich Kazondo, principal of the NBWPF.
“We realise how important it is that a pension fund is not burdened by excessive amounts of outstanding claims. It not only negatively affects the life of the retired member or their dependents or beneficiaries, but it practically remains a liability on the books of the fund. The unclaimed benefits also become a burden as they need to remain locked within the fund, which makes resource allocation and investment planning more difficult. This needs to be avoided,” Kazondo added.
As of 2022, an estimated 2 500 benefits remained unclaimed from NBWPF. The fund initiated a tracing process for these unclaimed members in September 2023. Since then, more than 1 900 members have been located, and payments have been successfully made to more than 800 people. Additionally, the fund says it inherited a group of active non-contributing members; and is actively tracing this group, along with the traditional unclaimed beneficiaries.
Kazondo elaborated: “We believe this is a big achievement. It is really important to us. Ultimately, we want our stakeholders to know and trust that we make every effort to ensure that claim benefits are paid out – either to the retiring members themselves, or to their determined beneficiaries. This is one of the major priorities for us. We also want retiring members to benefit from their savings for old age, and in the event of their death, we would like to see their dependents or beneficiaries also supported through benefits paid out by the fund”.
In this regard, NBWPF encourages current members and their employers to ensure that beneficiary forms are updated at least once a year. In addition, the NBWPF encourages people who had worked in the construction sector, and had made pension fund contributions but had failed to claim the benefits, to contact the fund immediately.
This also applies to those people whose deceased family members were members of the NBWPF.