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Not all contractors adhere to mandatory provision of pension fund

Not all contractors adhere to mandatory provision of pension fund

It is mandatory in the construction sector that employers register their most vulnerable workers with a pension fund and assist with contributions.

As the establishment of a national pension fund in Namibia remains on the cards, and the modalities and the nature of such a fund still need to be ironed out by government authorities in consultation with various stakeholders, the construction sector is the one industry that is taking the lead and has ensured that it is most vulnerable employees have adequate social protection, especially to achieve relative financial security upon retirement.

It is an important aspect when working towards decent work in the construction sector. As such, the Construction Industry Federation of Namibia (CIF) and the Metal and Allied Workers Union of Namibia (MANWU) in May 1990, collaborated to establish an umbrella fund for the industry, i.e. the Namibia Building Workers Pension Fund (NBWPF).

Principle Officer of the NBWPF, Enwich Kazondu said as a result of the joined commitment and focused efforts by the two parties representing both the employers and the employees in the construction sector, an agreement for the establishment of the fund was signed and therefore a key aspect that helped the industry to work towards creating decent work was jointly addressed.

“An important fact to consider is that all employers in the construction sector, irrespective of whether they are members of the CIF or not, are legally obliged to ensure that their workers are registered with a pension fund so that they, as well as their employees, make respective contributions,” added Kazondu.

The continued involvement of the NBPWF is further supported by stipulations in the bi-annually negotiated Collective Agreement between the CIF and MANWU. This agreement determines the minimum wage payable as well as the minimum employment conditions in Namibia’s construction sector. This includes the fact that employers in the sector must register their workers, as per the categories listed in the Collective Agreement, with a pension fund. The preferable pension fund is the NBWPF as an umbrella fund for the industry. However, employers and employees can also opt for other pension funds that offer similar or indeed better benefits than the NBWPF.

However, there is some concern, that there are some businesses that do not adhere to these regulations, which undermines the intention of securing social protection, especially at the point of retirement. This is because some businesses are struggling to afford the contributions in the currently very precarious economic environment that continues to have a hugely detrimental effect on the construction sector.

CIF Chief Executive, Bärbel Kirchner said they are aware that some companies have not registered their workers, as per the categories listed in the gazetted Collective Agreement, and are not making any contributions on their behalf and some businesses clearly ignore these statutory requirements and blatantly disregard them. “These, however, would be mostly those that are not members of the CIF. Our members have to adhere to a Code of Conduct and other businesses, who in the past have made contributions, are also struggling at the moment to continue doing so, due to the lack of work in the sector. Many see this as part of a measure to prevent further retrenchment,” she said.

She explained that for that reason, they want to see more majority-Namibian-owned businesses get contracts both in the private and public sectors. “It is not only important given job creation, maintaining and building capacities in the industry, but also given effective contribution to government revenues as well as building a future safety net at the point of retirement for those working in our sector,” she added.

Secretary-General of MANWU, Justina Jonas is particularly concerned about foreign contractors not adhering to related mandatory requirements, i.e. registering their teams with a pension fund and making relevant contributions, thus acting in contradictions of the law. “We have noted from our annual random site inspections that many projects managed by foreign contractors do not register their workers with a fund. There is no sense of caring for their workers after the end of their working life, to mitigate poverty and maintain their standard of life during retirement age,” she concluded.


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