Namibia should introduce phased mandatory retirement contributions and strengthen pension preservation rules to improve the long-term sustainability of its retirement system, industry experts have said following the country’s inclusion in the 2025 Mercer CFA Institute Global Pension Index.
The recommendations were discussed during an event hosted by the CFA Namibia Chapter in collaboration with Old Mutual’s Corporate Segment, where stakeholders assessed Namibia’s performance after the country received a C rating in the global index.
While Namibia recorded a strong integrity score, sustainability was identified as the weakest component of the pension system, with experts pointing to low household savings, limited labour force participation and the absence of compulsory retirement contributions as key structural gaps.
Niko Smit, Chief Specialist: Actuarial at Yala Consultants and Actuaries, said reforms should begin gradually rather than waiting for a comprehensive policy overhaul.
“In my view, the best way to do it is to start with something. We do not need to begin with a grand project. Start at 5% or even slightly lower and build from there, because waiting for a comprehensive overhaul will take too long,” Smit said.
He warned that voluntary retirement savings alone are unlikely to deliver adequate coverage in an environment characterised by high public debt, weak economic growth and rising household financial pressures.
“The moment you have high public debt and low economic growth, people simply do not have money for retirement savings in a voluntary environment. From a policy perspective, some level of compulsion will have to come in to strengthen sustainability,” he said.
Martinez Fabian, Managing Director of RVs Financial Services, said pension fund investment policies should also evolve to better support economic development and employment creation, particularly by allowing greater flexibility for investment in unlisted and productive assets.
“When you give investors of pension fund monies a bit more freedom, they tend to generate better returns and can invest in productive assets. Pension funds can assist with housing challenges and broader economic development without undermining long-term savings,” Fabian said.
Lovisa Indongo-Namandje, General Manager for Pension Funds and Friendly Societies at the Namibia Financial Institutions Supervisory Authority (NAMFISA), said Namibia’s strong integrity rating reflects a formal pension system that has existed since 1956, but noted that regulatory alignment remains necessary.
“We have had a structure in place for decades. What we are trying to do is bring everybody up to speed with the forerunners in our industry who have voluntarily implemented strong governance and risk management practices,” she said.
Sabrina Jacobs-Hailombe, governance specialist and director of the Retirement Funds Institute of Namibia, said improving coverage and limiting early withdrawals would be critical to strengthening adequacy and sustainability outcomes.
“Our pension funds are a mirror of our labour market participation. If we increase coverage and close loopholes that allow early withdrawals, we can strengthen asset growth and improve our ratings. We also need financial literacy so that preservation is understood as long-term protection,” she said.
Patricia Olivier, Managing Director of Old Mutual’s Corporate Segment, said Namibia’s retirement framework is structurally sound but incomplete without a fully implemented mandatory national pension pillar.
She noted that Namibia already provides a universal old-age grant of N$1,600 per month under pillar zero and has occupational retirement funds that have operated for more than five decades.
“These funds benefit from tax incentives, including deductible employer and employee contributions, tax-exempt investment returns, and a one-third tax-free lump sum at retirement. What really stands out is the integrity of our system — the governance gives confidence that whatever I get out is what I have put in,” Olivier said.
She added that the Pension Funds Act of 1956 will be replaced by the Financial Institutions and Markets Act No. 2 of 2021, introducing a modernised regulatory framework.
However, Namibia’s mandatory contributory national pension fund — provided for under the Social Security Act of 1994 — remains unimplemented nearly 30 years later, despite several proposed models, with the Ministry of Labour currently considering an International Labour Organization-backed defined benefit structure.
