Namibia has been struggling to establish a national pension fund (NPF) due to too many conflicting demands from various stakeholders on the design of the fund.
There have been a series of efforts over the years that aimed to bring into operation the NPF that was established by Section 34 of the Social Security Act, of 1994, but these initiatives to establish the fund proved futile.
The fund is meant to cater for people who are not covered by existing pension funds.
The design of the national pension fund, further has the aim of ensuring senior citizens are entitled to and do receive a regular pension adequate for the maintenance of a decent standard of living and the enjoyment of social and cultural opportunities.
In yet another attempt to get the fund off the ground, stakeholders this week gathered for a workshop to make headway.
During his opening statement at the two-day workshop in Windhoek on Monday, labour minister Utoni Nujoma said the primary purpose of the workshop was to discuss in detail the currently conflicting positions of his ministry and the Social Security Commission (SSC) on the design of the NPF with a view to resolve the problem or at least bringing the parties closer together on the design of the fund.
In 2018, the ministry expressed its dissatisfaction with a proposed National Pension Policy tabled by the SSC, which contemplated a defined contribution fund.
“The ministry was of the opinion that the policy did not effectuate the intention of the Social Security Act to create a solidarity fund wherein there is cross-subsidisation of lower-paid employees by higher-paid employees. I held the view that the proposed policy was not in line with Section 6 of Article 95 of the Namibian Constitution, which requires that State Policy should aim at: ‘ensuring that senior citizens are entitled to and do receive a regular pension adequate for the maintenance of a decent standard of living and the enjoyment of social and cultural opportunities,” said the minister.
He added the ministry was also of the view that all employers and employees should be required to participate in the fund.
The workshop was run by Andre Picard, chief of advisory services and head of the actuarial unit, Social Protection Department of the International Labour Organisation (ILO) that was asked to assist Namibia develop the fund. He is recognised globally as an expert on public pension funds.
Picard’s presentation was based on the basics concerning pension fund design and applicable international labour standards. He also discussed the ILO’s proposed design for a modified defined benefit fund that was developed in cooperation with the ministry and SSC, followed by a discussion and comparative analysis of the more recent SSC proposal for a defined contribution fund.
“My interest is that we establish the best possible NPF to protect Namibian workers upon retirement. I humbly appeal to all the participants to seize this opportunity to try to agree on a solution that is in the best interest of Namibian workers, who are the intended beneficiaries of the fund,” pleaded the minister.