The Namibia Financial Institutions Supervisory Authority has confirmed that lump sum cash entitlements on retirement will remain unchanged when the Financial Institutions and Markets Act is implemented.
The authority (Namfisa) on Thursday released a public notice clarifying the lump sum payments after the retirement fund industry raised concerns about the effects of the act (Fima).
“Namfisa wishes to clarify that the commutation rules will remain unchanged upon the initial commencement of the act,” registrar of pension funds Kenneth Matomola says.
This comes after a meeting between the retirement fund industry and Namfisa on Monday morning, during which the authority addressed a list of 18 concerns raised by the Retirement Funds Institute of Namibia (RFIN).
Commutation rules were a particular concern raised by the institute. Those rules allow members of retirement funds to receive one third of their benefit tax-free as a lump sum payment on retirement. It also allows members of provident funds to receive the remaining two thirds as a taxed lump sum payment.
Namfisa and RFIN directors on Monday said they were happy with the engagement and believed all stakeholders had engaged productively in discussions.
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