The Namibia Financial Institutions Supervisory Authority (NAMFISA) says unclaimed pension fund benefits decreased to N$218.7 million as of 31 December 2023, an improvement from the N$229.1 million reported in the prior year.
According to the Authority’s annual report for 2024, the decline reflects the successful tracing and payment of more beneficiaries during the reporting period.
“This is an encouraging movement observed in the reporting period, as it indicates that more members (or their dependents) whose pension fund membership ended without receiving their benefits were traced and paid,” said NAMFISA.
This comes as the total benefits paid in 2023 increased by 6.6% to N$12.3 billion, compared with the previous year.
“The growth in benefits correlates with continued withdrawals due to retirements and early withdrawals from members who resigned or were dismissed during the year. In addition, withdrawals due to retrenchments and deaths also contributed to the total benefits paid,” said NAMFISA.
In addition, the Authority noted that retirement benefits paid continued to increase at rates higher than contributions, and the benefits paid out by the industry have been growing for the past five years.
The total contributions received increased by 0.9% to N$10.0 billion for the year ended 31 December 2023, which is lower than the annual inflation rate of 5.7% reported for the previous period.
“The slow recovery in economic activity, which had an impact on employment and members’ contributions during the year, resulted in contributions not rising at the same level as inflation during the year under review,” said the report.
Meanwhile, the total retirement fund industry membership increased by 3.6% to 374,949 as of 31 December 2023, which comprised 348,895 active members and 39,508 pensioners.
“The increase in membership was due to new entrants into the sector owing to various factors such as additional employment and/or more employed persons being offered retirement benefits,” said NAMFISA.
Assets and liabilities Pension fund assets increased by 15.2% to N$237.1 billion in 2023, and current liabilities decreased by 3.2% to N$2.6 billion as at 31 December 2023.
“The decrease in current liabilities resulted from the lower benefits payable balance reported as at 31 December 2023. The active members’ share account increased by 6.6% to N$121.4 billion as at 31 December 2023, and the pensioner accounts increased by 2.0% to N$39.1 on the same date,” noted NAMFISA.
Additionally, the amount in reserve accounts increased by 44.9% to N$69.9 billion as at 31 December 2023.
“The change in active member and pensioner accounts correlates with the increase in the value of reserve accounts reported for the 2023 year, as these amounts reflect movement increases in investment asset values that contributed to the increase in all the reserve types,” said NAMFISA.
