FIMA is not just another acronym
Andreas Itula Shaanika |
There is no shortage of acronyms in the financial services industry. One that has increasingly entered conversations recently is FIMA, the acronym for the Financial Institutions and Markets Act, No. 2 of 2021.
For some, FIMA represents an important step in strengthening Namibia’s financial regulatory environment. For others, it is simply another complicated piece of legislation that belongs in the offices of lawyers, regulators and financial professionals.
But FIMA should matter to ordinary Namibians too.
It should matter to the teacher who has contributed to a pension fund for 20 years, the mineworker who sees a retirement fund deduction on every payslip, the young graduate who has just joined the workforce, the entrepreneur employing a small team and the nurse planning for retirement.
FIMA governs all non-banking financial institutions, so it should matter to anyone who is a member of a medical aid scheme, has bought an insurance product or invested in a unit trust.
FIMA is quite intimidating and, for most of us, it is easier to listen to what the FIMA experts are saying than try to make sense of the legislation and its numerous Regulations and Standards on our own.
The challenge is that we live in a world where there is as much misinformation as there is information. Social media allows for news to be spread within seconds but does not filter the truths from the untruths.
An unverified statement can quickly be accepted as fact. We should remember, however, that a confident statement is not a confirmation of fact. We need to test everything we read and hear to ensure that we are not caught up in a web of false statements, encouraging us to make financial decisions that rob rather than add to our financial prosperity.
So how can I be more discerning about what I hear about FIMA…? The most important to consider is the source of the information. Credible information sources include your retirement fund trustees or principal officer, the retirement fund administrator or NAMFISA.
It is also important to bear in mind that all retirement funds do not operate in the same way. They have different contribution structures, benefits, investment arrangements and governing rules. What applies to one retirement fund does not necessarily apply to another.
Your friend’s retirement fund experience may be genuine, but it does not automatically become your reality.
This is why Namibians need to be curious about their retirement fund benefits. Too often, important questions are only asked when leaving the retirement fund. Ideally you should be comfortable asking questions long before exiting the fund. Questions such as… Where are my retirement savings invested? How much am I contributing?
How much is my employer contributing? What benefits do I have? What happens if I resign? What happens when I retire? Is my beneficiary nomination up to date? Am I doing enough today to prepare for the retirement I want tomorrow? Am I part of a pension or provident fund?
These should be part of everyday financial conversations, and the FIMA conversation gives us the opportunity to do exactly this.
Rather than allowing legislation to become a source of fear or confusion, we can use it as an opportunity to improve financial education and encourage greater engagement between retirement funds and their members.
This is how we create financially informed citizens who understand that retirement planning is not something that starts when you receive a withdrawal form. It starts your first contribution.
So, don’t wait until you resign to become interested in your retirement fund. Be curious now. Ask questions. Verify the information. Seek to understand so that you are empowered to make informed decisions about your financial future.
– Andreas Itula Shaanika is the Head of Consulting for the Corporate Segment, at Old Mutual Namibia.
