Pensioners get a raise, urged to verify existence
The Government Institute Pension Fund Board of Trustees recently approved a 7.5% pension increase for its members with effect from 1 April.
According to GIPF Chief Executive Officer, David Nuyoma, the fund had performed exceptionally well, prompting a slight increase.
He said, “Last year, the Fund granted a 6.5% pension increase compared to 7.5% increase this year. Pensioners are able to enjoy a higher pension increase this year due to the exceptional financial performance of the Fund. The average annual returns over the last 5 years suggest that the Fund has been receiving good returns over inflation. This pension increment is thus well within the Fund’s affordability margin and will not have adverse financial implications for the institution.” Nuyoma explained that the costs of the pension benefit were carried by the fund and that thorough assessments were undertaken of its investment performance and ability to afford the necessary increments.
“Factors which influence such a decision include the performance of the Fund over the financial year, historical pension increases and Consumer Price Index which is used as a baseline to determine the shift in the prices of basic commodities. It has always been our strategy to grant inflation linked increases so that our pensioners are able to keep pace with escalating living standards,” he added.
On a cautionary, he said that pension increases were not compulsory in the rules of the fund, but rather granted after considering the factors mentioned.
. He said, “Currently the number of active annuitants is over 32,000, and during the past year the Fund has injected more than N$860,000 million into pension payment between April 2013 and March 2014. However, the overall annual payroll including other benefits paid during the same period amounts to N$1.5 billion, which is a significant amount filtering into our members’ social well-being as well as the Namibian economy.”
Historic increases granted to pensioners of the Fund over the past 13 years averaged between 6.5-10%. According to Nuyoma, the increases were above the market norms.
“The average annual returns over the last five years suggest that the Fund has been receiving good returns over inflation. This pension increment is thus well within the Fund’s affordability margin and will not have adverse financial implications for the institution,” he remarked.
The Government Institutions Pension Fund’s last actuarial valuation dated 31 March 2013 revealed that the Fund remained fully funded with over 103.6% ratio of assets to liabilities.
“We wish to re-assure our members that the Fund takes their well-being very seriously and will always strive to review member benefits in line with escalating market trends. We also appeal to all pensioners to remember to verify their existence at any GIPF or Nampost office near them to ensure that they receive their monthly pension and avoid being cut from the payroll system,” he concluded.