Government pension fund guilty of competition abuse

The Namibia Competition Commission (NaCC) has found the Government Institutions Pension Fund (GIPF) guilty of discriminatory behaviour, abuse of dominance, and the imposition of unfair selling prices. According to The Nambian, NaCC spokesperson Dina Gawases said the findings came as a result of Retirement Fund Solutions (RFS) filing a complaint on 5 August 2020, alleging that the GIPF and the two entities were engaged in restrictive business practices and abusing their dominance in the market. The two entities are Kuleni Preservation Fund (KPF) and Kuleni Financial Services (KFS), it said. ‘The commission found that following the introduction of the GIPF’s ‘member-retention strategy’, GIPF members, once in the process of withdrawing and preserving their benefits, are enticed to make use of KPF to the exclusion of other preservation funds in the market,’ Gowases said. She said through the arrangement with the GIPF, KFS enjoys an unfair competitive advantage as it avoids an obligation to cater for its administrative cost structure, which has to be funded from cash flow by all other competitive administrators in the relevant market. The commission also found that the GIPF was paying for KFS’ administration expenses with extended credit without repayment requirements while not doing so for any of KFS’ competitors. The commission is yet to make a final decision on the matter, Gowases said. ‘The commission wishes to invoke the process contemplated by Section 36 of the Competition Act and afford the respondents to make an opportunity to make written submissions and oral representations,’ she said.

Full report in The Namibian