The Forum for Experts on Social Protection (FESP) deliberated on “Retirement provisioning: Building an adequate and sustainable pension system in Namibia” with the aim to provide an update on the retirement systems in Namibia. The FESP held a robust and interactive experts dialogue on 01 September 2022 at Protea Hotel, Furstenhof, in Windhoek.
The public dialogue was moderated by Ricardo Goagoseb and comprised of Dr. Gerson Kamatuka, Chairperson of Funds AtWork Umbrella Pension & Provident Funds, Ms. Sara Mezui-Engo, Chairperson of Retirements Funds Institute of Namibia (RFIN) and Manager: Alternative Investments of Government Institutions Pension Fund (GIPF), Ms. Lovisa Indongo-Namandje, General Manager: Pension Funds and Friendly Societies of Namibia Financial Institutions Supervisory Authority (NAMFISA), Dr. Jesse De Beer-Kahl, Lecturer at the University of Namibia (UNAM) and, Mr. Ndjizuvee Haakuria, Secretary General of the Public Service Union of Namibia(PSUN).
The discussants shared their expertise on the complex system of Retirement Provisions in Namibia and the state of the pension funds, which are generally well situated in international comparison.
There are currently about 400 private pension funds in Namibia providing old age pension, death, disability, and retirement benefits. Only 43% of the Namibian workforce are covered by these pension schemes through formal employment in the Namibian economy. The remaining 57% are working in the informal sector and do not contribute to nor benefit from any pension scheme. There is a need to extend the pension system to include the informal sector. This extension should reflect the characteristics of the informal sector. A tailor-made pension scheme is necessary to further accommodate the diversity in the informal economy.
Mass retrenchments, which were caused by the Covid-19 pandemic over the past two years, have put a massive strain on the retirement sector. The economic situation forced unemployed citizens to withdraw from their pension funds as a result of salary cuts as many were trying to maintain the basic standard of living.
Beyond this crisis, financial literacy and the lack of understanding thereof, as well as not knowing the purpose of a pension schemes, are contributing factors to access pension savings before retirement. There is a need to look at the increasing pension coverage, to adopt a savings culture and to strengthen financial literacy in general.