Two and half years after the Financial Institutions and Markets Act (FIMA) was supposed to have come into operation, still consultations are on-going.
The consultations are a result of the public outcry against regulations in the FIMA which state that members of pension funds cannot withdraw more than 25% of their pension benefits before they have reached the age of 55.
In other words, FIMA states that a pension fund will retain (preserve or keep) 75% of a member’s savings until he or she has reached the age of 55.
Public consultations which were held in 2023 across the country were at some places ended in disagreement with members, mostly who belong to the Government Institutions Pension Fund (GIPF).
The members expressed a desire to have full rights to their benefits in GIPF at whatever age they may be, and that somebody else should not decide to preserve a member’s savings against the will of the member.
Meanwhile Namibia Financial Supervisory Authority spokesperson Ms Victoria Raimond says that the FIMA law includes a lot more than just the preservation clause which has made the legislation to hit a snag.
“Namibia Financial Institutions Supervisory Authority (NAMFISA) would like to stress that FIMA is not legislation covering preservation funds only. The object of the FIMA is to consolidate and harmonise the laws regulating the non-banking financial institutions, financial intermediaries, and financial markets in Namibia,” Raimond says
“FIMA addresses prudential and market conduct supervision of the Namibian non-banking financial institutions (NBFI), including governance and risk management of regulated entities.”
Raimond points out that FIMA provides for the regulation and supervision of: Insurance companies, agents, and brokers (Chapter 2); Financial Markets (Chapter 3); Collective Investment Schemes (Chapter 4); Retirement Funds (Chapter 5); Friendly Societies (Chapter 6); Medical Aid Funds (Chapter 7); Fund and Society Administrators (Chapter 8); Property held in trust (Chapter 9); and General provision – Chapter 10.
WHAT IS THE WAY FORWARD WITH FIMA?
“FIMA is expected to come into force once the Task Team on Preservation of Retirement Benefits has concluded its work,” Raimond states. “The date on which FIMA will come into operation will be communicated to the public at the appropriate time by the Minister of Finance and Public Enterprises.”
In the photo: NAMFISA’s corporate communications and consumer education officer Victoria Raimond.
