Nujoma: I have seen honorable members walking due to pension fund withdrawals”

Zorena Jantze

“I saw honorable members and former honorable members walking, taking taxis.

“Just two weeks ago, I saw one walking towards our building because this honorable member does not have a pension or a stable income.

“We have also seen it in the field of public service, especially nurses and teachers. This money spent will never come back, hence the principle of preservation.

GIPF CEO David Nujoma. Photo: File

These are the sentiments of the Director General of the Governmental Institutions Pension Fund (GIPF), David Nujoma, who met with the Parliamentary Standing Committee on Public Accounts and the Economy.

Nujoma briefed the committee on the upcoming Financial Institutions and Markets Bill (Law No. 2 of 2021) which proposes that pension fund members keep at least 75% of their minimum individual reserve (fund credit) until at least the prescribed early retirement age in accordance with the special fund regulations.

The draft bill is intended to replace the 1956 law on pension funds.

During the heated meeting, Nujoma was confronted by members of the pension fund transactions committee about how his money is spent, as well as some regulations that allow the GIPF to take over pension funds from single and n pensioners. having no children who could be selected as beneficiaries of the funds.

“It is a debate that is still raging. I would like to sketch out a scenario of our experiences at both the GIPF and the MPs Fund. Some members chose to quit before they could retire and cash out, regardless of the heavy tax penalties.

“We’ve seen most of these members come back in more or less 18 months asking ‘are you sure there’s nothing left because I’ve finished everything’. There are instances where we’ve taken a million to a single member. Those zeros look like a lot, however, as fast as they go in, they’re as fast as they go out. As leaders, we have to make unpopular decisions for the long term good,” Nujoma said.

The CEO faced questions from MP Celeste Becker, who said if a person has no beneficiaries, the GIPF keeps the money.

“The Constitution protects pension funds. What you are doing is an unconstitutional practice. You touch people’s pension funds without their permission and keep them for yourself. I hope the fund can break its silence on this issue and say it’s bad practice,” Becker said.

In response, Nujoma admitted that in the fund’s arsenal of services, this might be its weakest link. He shared, however, that the fund does careful calculations to strike a balance and bring fairness to all of its members.

Nujoma further noted that the final decision whether or not to establish the pension preservation fund will be taken by the Minister of Finance after public consultations.

Dolores W. Simon