Namibia eyes SA’s ‘two-pot’ pension model

Namibian MPs are pushing for a similar law to SA where workers can access their pensions before retirement. President Cyril Ramaphosa recently signed the Revenue Laws Amendment Bill that permits access to pension savings. The Namibian reports that Popular Democratic Movement (PDM) chief whip Elma Dienda, who tabled a similar motion in 2009, said ‘people are dying and leaving behind their hard-earned salaries for others to enjoy’. ‘Our needs are different and it’s also none of other people’s business how beneficiaries are spending their money,’ she said. Chairperson of the parliamentary Standing Committee on Economics & Public Administration Natangwe Ithete said Namibia should have had this system in place already. ‘We must never be a country that follows what others do. It was not supposed to first happen in South Africa before we implemented it here. It should not be a habit where others lead and we follow,’ he said. Pesidential hopeful Job Amupanda is advocating for government employees to have access to funds held by the Government Institutions Pensions Fund while they are still employed. He says discussions on this issue are ongoing and that progress is being made.

The Namibian notes that labour expert Sydwill Scholtz said there was a constant battle between current and future retirement needs. ‘Should this early pension access be considered for the Namibian market it should be conducted with proper education initiatives and the need for members to understand the long-term impact and loss on the compounding effect of such withdrawal as far as the interest growth on their benefits are concerned,’ Scholtz said. Economist Theo Klein said Namibia leads Africa in retirement capital relative to its economy, with savings at about 116% of its GDP, yet only 10% of Namibians can retire comfortably. ‘The fact that so few Namibians are able to retire comfortably will ultimately have an impact on the future generation as their incomes, through tax, can provide the government with income for future pension benefits. This is further exacerbated by the high youth unemployment rate. Given this context, we would need to safeguard retirement capital and not allow people to access it before retirement,’ he noted.

Full report in The Namibian