The Upside of Preserving Pensions

Every action or decision is anticipated to result in one of two outcomes: It can be either positive or negative.

Have you ever considered the benefits of protecting pension funds?

What advantages can Namibia as a whole receive? Is early retirement an option?

Preservation, as defined in the Pensions Act, is a mandate for occupational pension schemes to uphold benefits for members.

A preservation fund allows you to maintain your pension or provident fund savings without withdrawing your retirement savings if you switch jobs.

The same rule extends to personal pensions and retirement savings accounts.

Preserving pensions is considered a plus for a number of important reasons, both from the perspective of individuals and society.

One is financial security: Pensions provide a stable and predictable source of income, supplementing other retirement savings such as personal investments or social security benefits.

Preserving pensions ensures a reliable income stream to help retirees cover basic living needs, healthcare and other necessities.

It also enhances long-term financial planning: Pensions are designed to provide income for life, offering retirees peace of mind and financial stability.

Knowing a pension is in place allows individuals to plan their financial future more effectively, taking into account their expected retirement income.

What might cause a not insignificant number of people to oppose saving for retirement? Political reasons? Opportunism? Individual motives?

SECURITY AND RISK

When global supply chains seem unstable – i.e. when wars in some countries push up the price of certain commodities such as cooking oil and gas – preserving pensions can enhance protection against market volatility.

Unlike personal investments that may be subject to market fluctuations, pensions typically offer a guaranteed benefit amount regardless of economic conditions.

Preserving pensions shields retirees from risks associated with market volatility and ensures a steady income regardless of economic downturns.

Namibia is among a few countries in Sub-Saharan Africa that pays pensions to its senior citizens.

This contributes to social welfare by helping alleviate poverty among the elderly.

Through preserving pensions and ensuring adequate retirement benefits, governments and employers can promote social equity and support a dignified standard of living for retirees.

The idea of the Financial Institutions and Markets Act (Fima) is to reduce the reliance of senior citizens on public assistance programmes such as healthcare, government subsidies, drought relief and others.

This, in turn, can alleviate the burden on government resources and taxpayer dollars.

WEATHERING TOUGH TIMES

In 2019 and 2020, Namibia faced an economic recession for a number of factors, including a prolonged drought and the Covid-19 pandemic.

Countrywide, this could be seen in the repossession of houses and motor vehicles by banks.

People’s pockets were hard hit. At Oshikango, for example, businesses faced a significant and sudden decrease in purchasing power.

This not only affected the business sector but led to the inactivity of the Cunene Corridor, one of the busiest routes in the four main Walvis Bay development corridors.

Pension perseverance can enhance economic stimulus by providing pensioners with disposable income that helps support consumer spending and local businesses.

This helps sustain communities and contributes to overall economic growth.

Pension initiatives also foster inter-generational wealth transfer: They allow pensioners to pass on financial resources to family members, including future generations.

To maintain the existence of the Welwitschia Fund, a sustainable project initiated by the late president Hage Geingob, the government and lawmakers must push for early retirement and preserving a portion of retirement funds.

For years, the government has encouraged Namibians, especially graduates, to explore various entrepreneurial opportunities in order to generate jobs.

Can Namibia’s economic landscape support the growth of successful businesses that can provide employment for large numbers of Namibians?

Do we possess the essential skills and knowledge needed to create the next generation of leaders like Patrice Motsepe and Strive Masiyiwa in our nation?

CIVIL SERVICE EQUATIONS

Once the Fima Act (2021) takes effect, many employees with more than 60 years of government service will choose early retirement, leading to vacancies in ministries often filled by unproductive workers.

Numerous government departments are staffed with individuals who lack an understanding of today’s world and its challenges.

Certain government factions resist fresh ideas, such as computer-assisted decision support systems (DSS) – proposed by newcomers who suggest progressive and efficient approaches.

However, a new approach will enhance the quality of education as many unqualified teachers in the system will have to step down.

For the last decade, Namibia has trained teachers and nurses, but the government struggles to find employment for them because of oversaturated job markets.

As I see it, the government needs to decrease the minimum age for working from 60 to 45 to allow new graduates more opportunities to enter the workforce.

Nevertheless, the government cannot provide employment for everyone, which is why it constantly encourages the private sector to play its part.

• Hosea Shishiveni works as a project coordinator for the NGO Pensioner’s Network; hoseasn8@gmail.com