The Namibia Financial Institutions Supervisory Authority (NAMFISA) has opened a 30 consultative window to allow input into the proposed Financial Institutions and Markets Act (FIMA) following a backlash over the inclusion of a compulsory pension preservation clause.
The decision by the non-banking sector regulator also comes after various retirement funds distanced themselves from the inclusion of the contentious clause, which calls for the retention of 75% members pension when they leave employment before reaching the retirement age.
The retirement funds have argued that they had not been consulted over the inclusion of the clause despite having participated in the initial consultative process on the regulations.
“NAMFISA appreciates the public debate generated by the FIMA and its subordinate legislation, in particular Regulation R.F.R.5.10 dealing with preservation of retirement benefits. The demonstrable interest shown in this process by the relevant parties of interest is encouraging. NAMFISA is equally committed to this process as we find value in broadening the consultation process,” NAMFISA CEO Kenneth Matomola.
Finance minister Ipumbu has,however, come out in defence of the preservation clause in the Financial Institutions and Markets Act (FIMA), arguing that the proposed regulations will instill a savings culture in the country.
He said the existing low retirement savings culture in the country increases the future burden on the state with more people becoming dependent on social grants and public services.
Shiimi, who has the final discretion to review or rescind the proposed regulations before they are gazetted into law, however, said more consultations needed to take place with all stakeholders.
The proposed FIMA legislation will replace the existing legislation for non-banking institutions regulated by the NAMFISA and will govern retirement and medical aid funds and their administrators, short- and long-term insurers, collective investment schemes, and asset managers.
