The Retirement Fund For Local Authorities and Utility Services in Namibia (RFLAUN) says government is still moving ahead with the promulgation of the Financial Institutions and Markets Act (FIMA) on the 1st of October 2022 despite Finance minister Ipumbu Shiimi having announced a postponement.
According to the retirement fund, the postponement announced by Shiimi was in relation to the contentious preservation clause.
“The Fund would still like to inform the members that the postponement of the proposed regulations only affects Regulation No: RF.R.5.10. The implementation of FIMA is ,however, still scheduled for 1 October 2022 as promulgated,” a letter shared with its members read.
RFLAUN said because of the development, it had submitted its input to Namibia Financial Institutions Supervisory Authority (NAMFISA) after consulting its members regarding the proposed Regulation No: RF.R.5.10., with 84% of its members having voted against their retirement benefits being preserved when exiting a Retirement Fund.
“As soon as the final determination on preservation is made, RFLAUN will communicate to the members timeously, hence we caution members against any hasty decision regarding retirement benefits during this time when no decision has been taken regarding the preservation of benefits.
RFLAUN had also recommended to NAMFISA that, “In future, members can whilst still in service and actively participating in the fund, access one-third of the available accrued portion at that date in cash to alleviate financial distress.”
The decision by Shiimi is May came after various retirement funds had 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.
NAMFISA following the backlash, opened a 30-day consultative window to allow for further input into the proposed regulations.
The proposed FIMA legislation is expected to replace the existing legislation for non-banking institutions regulated by the NAMFISA and govern retirement and medical aid funds and their administrators, short- and long-term insurers, collective investment schemes, and asset managers.
