MPs have access to 70% of pension for home loan

Members of parliament (MPs) have access to 70% of their pension fund for housing loans, minister of finance and public enterprises Iipumbu Shiimi said last week.

Shiimi was responding to Popular Democratic Movement chief whip Elma Dienda in the National Assembly, who questioned the agreement MPs have to sign.

“As MPs where is our money invested, and why must we sign an agreement with Standard Bank? How will this loan agreement affect my third lump sum when I am no longer an MP?” she asked.

Shiimi said a loan would only affect a lump sum of a third if an MP resigns before fully repaying the loan.

“The outstanding loan balance would be deducted from your lump sum. It’s’ important to note that the maximum loan amount you can access is limited to 70% of your third lump sum,” he said.

The minister said the Government Institutions Pension Fund (GIPF) provides a pension housing loan facility backed by pensions with Standard Bank Namibia.

“The fund provides assurances to the bank, leveraging the members’ accrued pension benefits, and no return . . . the bank extends a loan to the member,” he said.

Dienda asked how the bank fit in and who would be paying.

The minister said the GIPF provides a guarantee or collateral based on an MP’s pension for a housing loan offered by the bank.

“Currently, the pension housing loan facility does not involve direct loans from your pension accrual. Instead, it operates as an indirect loan, where the bank lends the money, and the fund offers a guarantee,” he said.

“Therefore, you are responsible for repaying the bank loan, including the interest,” he said.

Dienda further asked whether civil servants would be eligible for this benefit.

“Regarding the pension-backed housing loan facility for civil servants, the process is nearing completion, with only the issuance of a deduction code pending,” Shiimi said.

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