Namibia’s retirement fund industry continued its upward trajectory, reporting a 2.5% quarter-on-quarter increase and a 10.5% rise year-on-year, reaching a total value of N$3.1 billion by the end of 31 March 2024.
According to the Namibia Financial Institutions Supervisory Authority’s (NAMFISA) quarterly statistical report, over the past 13 quarters, the total benefits paid have shown considerable fluctuations due to factors such as death, retirement, early withdrawals, and retrenchments.
“During the quarter under review, the industry reported higher instances of withdrawals due to retirement, early withdrawal, disability and death, compared with the previous quarter,” said the report.
Meanwhile, contributions to the industry also grew by 2.5% quarter-on-quarter and 4.8% year-on-year, amounting to N$2.7 billion for the quarter ending 31 March 2024.
“The quarterly increase in contributions coincided with salary increments effected by employer groups during the quarter under review,” the report noted.
The quick ratio, which measures the proportion of contributions to benefits paid, held steady at 87.6% for the quarter ending 31 March 2024.
“This figure is consistent with the previous quarter but lower than the 92.4% recorded for the same quarter last year. The quick ratio has remained within the prudential range of 73.5% to 112.1% for 15 of the last 16 quarters,” the report highlighted.
Conversely, the current ratio, which compares current assets to current liabilities, fell from 81.0% as of 31 December 2023 to 71.0% by 31 March 2024.
This decline is also below the 74.0% reported a year ago, prompting a need for careful monitoring of liquidity ratios to prevent potential negative impacts.
“The value of retirement fund investment assets saw an increase both quarter-on-quarter and year-on-year during the first quarter of 2024. This positive trend is attributed to favourable performance in investment markets,” the report stated.
The geographical allocation of investments shifted during the quarter as investments in the Common Monetary Area (CMA) and Africa collectively made up 17.3% of the total.
“Domestic investments decreased to 48.3%, in line with the 45.0% minimum domestic asset requirement. The remaining 34.4% of investments were held in international markets,” said the report.
