WINDHOEK - The Government Institutions Pension Fund (GIPF) yesterday announced an increase for its pensioners that is well above inflation. At a meeting held on May 27, 2014, the GIPF Board of Trustees approved a pension increase of 7.5 percent, which will become effective April 1 this year, and which is higher than the year-on-year inflation rate of 5.4 percent recorded at the end of March 2014.
Historic increases granted to pensioners of the fund over the past 13 years averaged between 6.5 percent and 10 percent. According to the GIPF’s Chief Executive Officer, David Nuyoma, the exceptional financial performance of the fund made the increase possible.
Nuyoma also explained that the cost of providing the increase in pension benefits is carried entirely by the fund, after the institution conducted a thorough assessment of investment performance and its ability to afford the increase.
“Factors which influence such a decision include the performance of the fund over the financial year, historical pension increases and the Consumer Price Index (CPI), which is used as a baseline to determine the shift in the prices of basic commodities,” explained Nuyoma.
“It has always been our strategy to grant inflation linked increases so that our pensioners are able to keep pace with escalating living standards,” he said.
He also pointed out that pension increases are not compulsory in the rules of the fund but are rather granted after considering the influential factors.
“It is worth noting that these increases are above market norms and we take pride in the fact that the GIPF is considered to be a trendsetter in this regard.” The GIPF currently has over 32 000 active annuitants and during the past year, between April 2013 and March 2014, the fund injected more than N$860 million into pension payments.
The fund’s overall annual payroll, including other benefits paid, during the same period amounted to N$1.5 billion, which Nuyoma described as a significant amount “filtering into our members’ social well-being as well as the Namibian economy.”
“This pension increment is thus well within the fund’s affordability margin and will not have adverse financial implications for the institution,” he said. Furthermore, the fund’s last Actuarial Valuation, as at March 31, 2013, revealed that the fund remains fully funded with a ratio of over 103 percent of assets to liabilities.
By Edgar Brandt
New Era Reporter
2014-06-05 11:43:23 | 6 years ago