Good times roll in for pension fund members
Members of pension funds who can not afford to acquire property or land will soon be able to access pension-backed home loans from banks after the Minister of Finance announced this week that amendments to the Pension Fund Act of 1956 have now been finalized.
The amendments allows pension fund members to access part of their benefits to acquire homes even in communal areas, Finance Minister Saara Kuugongelwa- Amadhila announced Wednesday.
The country’s biggest pension fund, the Government Institutions Pension Fund (GIPF), last year gave an October 31 deadline for the amendment of its rules that would enable members to access a pension-backed home loan.
CEO David Nuyoma told the Economist soon after his appointment as head of the N$60 billion plus fund that one of his greatest challenge as CEO will be to find a way of optimising benefits to members given the resources at the fund’s disposal, but in a sustainable manner.
Nuyoma said at the time that it does not make sense for the GIPF to have billions of dollars only for the fund’s bank statement to look good while members are living in poverty.
He said then: “We have to at all times continue to review the benefits that we are offering and also consider, within the context of the resources at hand and the sustainability of the fund, what else we can do to benefit our members. One of such, which is a basic right to everyone, is housing. We have seen that only 20% of our members have bonds. As a consequence, you have people who are living in sub-standard conditions in the informal settlements.
“So we have to look, within the confines of the act [Pension Fund Act] and also within the framework of the rules, at what we can do, and how creatively we can apply our minds to make it possible to have a housing facility and for the members to benefit accordingly.” Minister Kuugongelwa-Amadhila also announced Wednesday that the amendments to Regulations 15 and 28 and the new Regulation 29 are now in force. The minister said the regulations will make it possible for pension funds to channel savings towards unlisted investments in order to support local economic development. The amendments became effect on 01 January 2014, the minister said.