The Social Security Commission (SSC) says the fact that it is considering allowing members to claim benefits from the age of 55 would not force employees to retire earlier.
SSC acting executive director Ben Nangombe says the commission is currently reviewing the eligibility criteria for the retirement benefit payable under its Maternity Leave, Sick Leave and Death Benefit (MSD) Fund.
He says the proposal concerns the age at which a member may claim the benefit and does not change the retirement age set by employers.
“The matter the commission is seized with concerns only the age from which a member may claim the commission’s benefit,” Nangombe says.
He says the Social Security Act does not prescribe a retirement age and employers are allowed to set retirement ages through their own policies and conditions of employment.
The commission is currently considering lowering the qualifying age for the benefit from 60 to 55 following enquiries from members and stakeholders.
Nangombe, however, says the proposal has not been approved and the current benefit rules remain in force.
“Any such change is subject to an actuarial assessment of its impact on the financial sustainability of the fund,” he says.
The process requires independent actuarial experts to assess the proposal, the consideration of their recommendations by the SSC board of commissioners, approval by the minister of justice and labour relations and publication in the Government Gazette.
Public Service Commission chairperson Patrick Nandago says the commission would be one of the major stakeholders to be consulted.
“For now, no engagement has taken place between the commission and the Social Security Commission,” he says.
AFFORDABLE, SUSTAINABLE?
Teachers Union of Namibia secretary general Mahongora Kavihuha says the union is not opposed to the proposal in principle, “but we are questioning the affordability and sustainability of that decision”.
He says the SSC should first assure workers that it can accommodate people who may claim benefits from the age of 55.
Workers and employers should not later be required to increase their contributions to the fund because of a decision that was not thoroughly considered, Kavihuha warns.
Economist Omu Kakujaha-Matundu says lowering the benefit age could have serious costs.
“You could also lose some of your skilled labour while they are still very young,” he says.
Economist Salomon Hei says earlier access to funds could potentially increase disposable income and household consumption, but adds that the impact would depend on the financial modelling of the proposal.
He says the proposal could, in the short term, trigger consumer demand if members spend the money within the domestic economy instead of waiting until the age of 60.
Nangombe says the SSC would consider the views of employers, employees and the government, as well as the long-term financial sustainability of the MSD Fund, before any decision is made.
He says the public would be informed through the SSC’s official communication channels once a decision has been made.
