A defining year for pensions

 The year before us promises to be both exciting and challenging for the pension funds industry, and it is important that we begin it with clarity, preparedness, and resolve.

Towards the end of last year, the Namibia Financial Institutions Supervisory Authority (Namfisa) informed the non-banking financial services industry that the honourable minister of finance had announced the intention to implement the Financial Intermediaries and Markets Act (FIMA). Although FIMA was passed into law in 2021, its implementation was deferred, largely due to public concerns around Regulation 5.10 [pension preservation], which proposed compulsory preservation of pension savings until retirement. 

Following widespread public consultation conducted by a Ministerial task committee, the outcome was clear that there is overwhelming opposition to any form of compulsory preservation.

Towards the end of last year, the Cabinet granted the Minister of Finance a mandate to proceed with the implementation of FIMA, subject to Namfisa addressing the material concerns raised by the pension funds industry. While FIMA implementation will mark an important step toward regulatory certainty, it also introduces enhanced governance, compliance, and operational demands that will reshape how we all operate.

At the same time, the industry must prepare for another potentially transformative development. The Social Security Commission appears to be advancing plans to introduce a National Pension Fund (NPF). The SSC has already issued a public request for proposals to engage actuarial, investment, and administration experts to assist with the implementation of the NPF, based on a design developed with the support of International Labour Organisation (ILO) consultants. This design envisages mandatory participation and contribution by all employers and employees in the formal sector.

Taken together, the implementation of FIMA on the one hand and the proposed NPF on the other will fundamentally alter the retirement savings landscape. These changes will undoubtedly present challenges, and it would be unrealistic to assume that the industry will emerge unchanged. However, periods of disruption also create opportunities for those who are prepared, adaptable, and committed to long-term value creation and sustainability.

Internally, we have taken deliberate steps to ready ourselves for this new environment. We have built capacity to meet FIMA requirements, strengthened our governance structures, and invested in additional internal resources and our new, future-fit Everest administration platform. We have also developed mitigation strategies to manage the potential impact of the NPF, while acknowledging that these reforms will continue to evolve. In line with our new government’s motto, it will not be business as usual for us either.

We are actively considering strategic options to ensure that we remain the preferred partner for pension fund management in Namibia, with a continued emphasis on premium, locally rooted service. As always, we will balance growth ambitions with long-term sustainability, guided by our values and our unwavering commitment to delivering unrivalled fund management services.

As we embark on another year, we look forward to walking hand in hand with our clients, partners, and employees. Together, we will navigate the changes ahead and continue to safeguard the retirement outcomes entrusted to us.

Marthinuz Fabianus is the MD of RFS Fund Administrators. He made the remarks in a new year's address to RFS' stakeholders.