Namibia weighs two-pot pension system amid broader reform talks

Government Institutions Pension Fund (GIPF) CEO Martin Inkumbi has urged that discussions around a two-pot pension system, recently introduced in South Africa, should focus less on its adoption and more on ensuring pensions adequately support Namibia’s future retirees. Speaking at the GIPF’s 2024 annual report launch, Inkumbi addressed how such reforms might affect Namibia’s largest pension fund amid the anticipated Financial Institutions Market Act (FIMA), which will regulate non-banking financial institutions, including pensions.The two-pot system allows retirement fund members to withdraw part of their savings before retirement while preserving a portion for later years. In South Africa, where it took effect on 1 September 2024, contributions are split into an accessible ‘savings pot’ and a locked ‘retirement pot,’ offering flexibility without requiring resignation. Six weeks after its launch, South Africa’s tax service reported R21.4 billion in withdrawals, per Reuters.“Maybe it should be very clear that whether a two-pot system or any other system, it is not going to be a GIPF invention. The type of pension system, whether two-pot or the current model being followed at the moment, it is really at the high level where I would say the national leaders are thinking of and planning a pension system that will adequately provide for pensioners in Namibia,” Inkumbi said. According to Inkumbi, the adoption of a two-pot system was also not only likely to affect members of the GIPF, but pension fund members in general. Meanwhile, the two-pot retirement system has generated just under R13 billion in revenue for the South African government year to date – more than double the initial estimate of R5 billion, according to the preliminary revenue collection figures for the 2024/25 financial year, Moneyweb reported. Figures released by the South African Revenue Services (SARS) indicate that tax directives for the withdrawals were valued at R12.9 billion for the period – R7.9 billion more than the projected R5 billion. According to SARS' figures, more than 2.5 million tax directives were finalised, resulting in a gross lump sum payout of R47.7 billion.

Namibia weighs two-pot pension system amid broader reform talks

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Republikein 2025-04-30

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Namibia weighs two-pot pension system amid broader reform talks

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