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Controversial pension clause takes centre stage at workshop

The parliamentary standing committee on economics and public administration is hosting a consultation and oversight workshop on the Financial Institutions and Markets Act (Fima) at Swakopmund this week, amid public outcry over a specific clause within the new law.

The pension preservation clause, which mandates that members retain 75% of their minimum withdrawal benefit until they reach 55 years of age, has become the subject of much public debate.

In his official opening address yesterday, chairperson of the standing committee Natangue Ithete emphasised the urgency of understanding and addressing public concerns.

“There’s a public outcry. We should speak on behalf of the public. That’s why we’re here: to speak on behalf of the Namibian public,” said Ithete.

The workshop’s goal is to comprehensively review Fima, a notably detailed legislation of over 400 pages divided into 11 chapters. The committee is keen to shed light on contentious areas, particularly those raising public concern, like the pension preservation clause, he said.

Ithete highlighted the importance of stakeholder engagement and legislative understanding.

Fima, gazetted on 30 September 2021 to replace the outdated Pension Fund Act of 1956, is a piece of legislation governing the financial sector in Namibia. The act is designed to regulate and supervise financial institutions and markets, promote financial stability, and protect consumers’ interests.

Ithethe noted that despite these intentions, some sections of the act have provoked public disquiet. The pension preservation clause, in particular, has led to widespread public debate, prompting this series of stakeholder consultations. He said this workshop, continuing the consultation process initiated in Windhoek, aims to scrutinise Fima chapter by chapter, to understand and address public concerns, as well as ensure the act’s effectiveness in promoting financial stability and protecting consumer interests.

“We’re here to speak on behalf of the Namibian public, the majority of this country, and that’s democracy. The majority rules. The public rules. The public put us there to represent them,” he said.

Fima was supposed to come into effect on 1 October last year, but due to the public outcry, the Namibia Financial Institutions Supervisory Authority (Namfisa) announced the postponement of the operationalisation of the law.

The act has come under fire for possibly being difficult to apply, as some regulations that were supposed to aid in smoothing out its application appeared to raise administrative costs. Industry, trade unions and the public have also voiced at various platforms that the laws were not adequately consulted on.

The workshop will bring together representatives from various stakeholders such as Namfisa, the Ministry of Finance and Public Enterprises, pension funds, insurers and associations.

A report on the consultative and oversight workshop on Fima will be developed, with recommendations for addressing concerns raised about the proposed pension preservation clause and other provisions of the act. Strategies for addressing potential risks and challenges associated with the implementation of the act will also be recommended.

The outcomes of the workshop will inform the parliamentary standing committee on economics as it continues to review and revise the act.