National Pension Fund feasibility goes to board
After eighteen years stuck in a rut, the Economist this week learned that the latest feasibility study to determine the operational framework of the National Pension Fund is due to be submitted to the Social Security Board before the end of the month.
The most recent efforts to establish a National Pension Fund seem to be progressing well with a review by the Board of the Social Security of Namibia (SSC) scheduled during November. The feasibility study, upon approval by the SSC board will also be presented to the Ministry of Labour and Social Welfare.
Approached for comment by the Economist, Social Security Commission Manager: Research and Development, Uahatjiri Ngaujake said, “The research work related to the feasibility of the National Pension Fund is almost complete, with the final reports to be presented to the Board of the SSC during November 2014.
If approved by the Board, the reports will be forwarded to the Minister of Labour and Social Welfare for political consideration. The Ministry of Finance as a key stakeholder will also be notified of the contents of these reports for their input.” Ngaujake further explained that government input into the feasibility study was imperative, with the timely completion hinging on its ability to give the Social Security Commission its feedback as soon as it is complete. He added “Since government input is beyond the control of the Social Security Commission, we shall not know when to expect that input, which is critical for the establishment of the National Pension Fund. Our hope is to get this feedback as soon as possible, hopefully during quarter 1 of 2015.”
While the Social Security Commission lays the foundation for the establishment of the country’s first national pension fund scheme, policy makers in government will have to grapple with certain issues, amongst others, whether the fund will be mandatory to all the citizens regardless of membership to existing pension funds, the funding of the pension fund scheme, how and who will manage the fund, contributions payable by the members of the fund, the tax deductions payable upon maturity or death and ultimately the desired aim of the scheme. Research conducted by African Alliance Securities places the framework upon which a pension fund is established under three frameworks that aim to integrate the needs of the ageing population into a coherent system that takes care of its citizens. The establishment of a national pension fund may ultimately also lead to a reform of the whole pension fund structure as witnessed in Kenya, Nigeria and Ghana. As government tinkers with the establishment of the fund, policy makers will have to lend their eyes and ears to the Ghanaian model where implementation has bogged down the establishment of a pension fund system.