Pension fund changes for MPs

CABINET has approved an amendment to the pension fund rules for Members of Parliament and other office bearers, according to Prime Minister Nahas Angula.

At the moment, MPs who retire from the National Assembly before the age of 55, or whose term of office comes to an end before that age, have to pay tax on their one-third lump sum pension payout. MPs older than 55, on the other hand, enjoy tax exemption.’This applies to those MPs who joined the Fund after December 2000 and discriminates against younger members,’ the Prime Minister said on Tuesday. ‘It is against this background that the trustees of the Fund agreed to change this rule and to treat all MPs equally.’The amendment was also necessary because the pension fund for MPs and other office bearers changed from a defined benefit to a defined contribution fund on January 1 2001. ‘Defined benefit pension funds such as for civil servants are guaranteed by the employer [Government] should they under-perform. In the case of the defined contribution pension the person gets out what the person has put in. Should the fund under-perform or is badly managed, the members suffer the consequences,’ Angula said. ‘It is better to amend the rules to allow a member to access a portion of their pension money in a legitimate manner.’According to the resolutions of the fund trustees after a meeting in August 2009, the changes had already come into effect on September 1 last year. The six trustees however only signed the agreement on September 14 2009.