The Namibian government is closely monitoring the membership numbers of the Government Institutions Pension Fund (GIPF) amid concerns that the fund is losing more members than it is gaining due to talks of considering resizing the public service.
For the financial year ended 31 March 2022, the fund recorded a 2.4% decline in active membership, from 101,027 to 98,623 members. This trend could be exacerbated by the suggestions to reduce the size of the government workforce—with a wage bill of around N$30 billion annually—to allow for better salary adjustments without further ballooning the wage bill.
Finance and Public Enterprises Minister Iipumbu Shiimi expressed concern about the impact of the public service resizing plans on GIPF, which offers guaranteed pension and related benefits to all public servants.
Speaking during a recently held budget discussion, Shiimi noted that the situation could lead to GIPF experiencing a deficit.
He emphasised the importance of addressing the issue, saying: “Although there are efforts to reduce the public service wage bill, we also want to ensure that the government is still actively recruiting new employees.”
When The Brief contacted GIPF for comment, the fund said it has not received any communication from the government regarding its plans to resize the public service.
“Retrenchment benefits in general form part of the bouquet of GIPF pension benefits and are provided for under the Rules of the Fund. This being an important matter, the GIPF stands ready to engage and where possible advise the employer on all the possible implications this may bring about,” the fund’s Chief Executive Officer David Nujoma told The Brief.
GIPF recorded an 8.6% growth rate in assets to N$147.9 billion for the financial year ended 31 March 2022, up from N$136.2 billion recorded in the comparable period, while member contributions increased by 1.2% to N$4.51 billion. The fund paid out N$5.54 billion to its members, an increase of 7.5% from N$5.15 billion the prior year.
The government pension fund’s core mandate is to ensure that pension and related benefits are paid once they mature, and that income, in the form of member contributions, is invested wisely to generate returns. As the biggest participating employer, the Namibian government is a key and strategic stakeholder of the fund.
