The Government Institutions Pension Fund (GIPF) has recorded a surplus of N$16.5 billion according to an Actuarial Valuation Report released on Friday.
The pension fund’s liabilities and reserves reached a high of N$118.960 billion while the actuarial value of the assets stood at N$135.482 billion.
The actuarial surplus thus amounted to N$16.522 billion as at valuation date, March 2021.
“The valuation results show a funding level of 113.89% as at the valuation date and we can consequently certify that the Fund is currently in a financially sound condition. This is an increase from a funding level of 100.70% as at the previous valuation date,” said Sudhir Ramdass, an Actuary and Consultant of the Humanity Employees Benefits Co who conducted the valuation.
He noted that the GIPF’s practice over previous valuations has been to pay additional amounts to exit from the Fund, reflecting a proportion of surplus determined from the funding level, which is 13.89% of the Fund.
“Should the practice be followed then additional amounts of 13.89% of liabilities will be payable any exits from the Fund after the valuation date. We note that the current internal Funding policy guideline of the GIPF sets out the Board’s intent to implement a benefit security margin of between 1% to 5% of liabilities, after contingency reserves,” he explained.
He further indicated that while there has not yet been a formal implementation in the Fund’s reserve and liability structure and Rules, the additional amount that can be allocated could be reduced to 8.89% of liabilities should this be implemented.
Additionally, GIPF’s internal funding policy is within ideal range and the guideline aims for a funding level (after contingency reserves) of between 105 and 115 % over time.
“We note that as at the current valuation date, the funding level is within this ideal range. The valuation revealed Reserves held of N$ 21.4 billion, which is 21.93% of liabilities, a decrease from 31.11% of liabilities as at the previous valuation,” said Ramdass.
