Private Portfolio – Weeding out the pensioners
This week a local daily newspaper carried an article wherein it revealed that legislation is contemplated to introduce a type of test to be applied before a Namibian pensioner who has reached the retirement age of 60, will qualify for the state old age pension. This pension grant was recently increased to N$550 per month.
Should this endeavour succeed, it will once again confirm the precarious financial position that our society finds itself in. Admittedly, any social security system providing old age pension or other similar benefits can only succeed if the contributions in one way or another are sufficient to carry the cost of providing such benefits.
We do not have a national social security system where the gainfully employed people contribute to enable the retired members of society to receive a pension.
This system is based on a social contract that requires enough young people to support an ever increasing number of aged people.
How difficult it is to maintain such a social contract is now plain to see in countries such as France and Germany, where moves are afoot to postpone retirement ages to 67 before becoming entitled to a social security pension.
Locally however, we are still very far away from being able to establish such a system. For one, we have too many unemployed citizens.
Currently the state old age pension is funded from tax revenues and here we have the same problem that South Africa also has to deal with.
The existing tax payer base is simply too small to cover all the expenditure and the tax paying public is already being taxed to the hilt.
When I look at how the tax revenues are being expended, I can only become cynical and say that again the weakest in society, namely the aged, may have to bear the brunt.
What will be the cost of administering such a test to determine who does and who does not qualify for an old age pension?
It is quite ironic that I meet many pensioners who are simply too proud to claim this old age pension. I always point out to them that they dutifully paid their taxes and continue to do so with no relief. So why not at least claim this pension even if it only covers a portion of the monthly DSTV subscription?
This introduction of the means test will just be another slap in the face of the tax paying public that keeps this country going.
The bottom line of all of this, is what I have mentioned many times before. When it comes to providing for retirement it is everybody’s own responsibility and any hope or thought of a government being able to provide for such, is a pie in the sky.