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The FIMA introduces significant changes from the Pension Funds Act to the retirement funds industry and all stakeholders. These changes will raise the cost levels of retirement funds significantly, which members will ultimately bear. This newsletter and the following one will present an overview of these wide-ranging changes.

  • The board of trustees -
    • The duties of the board of a fund are now defined
    • The board of trustees, principal officer, and other offices must meet fit and proper requirements as determined by NAMFISA
    • Certain persons (administrator, actuary, valuator, and others) may not serve on the board of trustees
    • The members must elect at least half of the number of board members
    • A trustee must inform NAMFISA on becoming aware of any material matter seriously prejudicing the financial viability of the fund
    • The board must advise NAMFISA when it replaces a trustee or terminates his service and must give the reasons for the removal of a trustee before the expiration of his term
  • Enhanced reporting requirements:
    • The fund must submit an annual report to NAMFISA
    • The fund must report to its members-
      • An annual report with minimum prescribed information
      • Annual benefit statement with minimum prescribed information;
      • A quarterly report on contributions with minimum prescribed information
    • The fund must provide the following documents to each member, free of charge-
      • The rules of the fund
      • Any rule amendments
      • The most recent annual financial statements
      • The most recent valuation report
    • Payment of benefits
      • The fund must affect the transfer of a member’s benefits within 60 days from receipt of a prescribed notice of transfer, and prescribed penalty interest applies on any transfer after 60 days
    • Payment of contributions –
      • The employer must pay prescribed penalty interest on the payment of contributions from day eight after becoming due
    • Allocation of death benefits –
      • Funds must apply a vastly different death claims process
    • Damages or losses caused by an employee –
      • The employer cannot claim against a member’s benefit anymore for any reason
    • Beneficiary nomination form
      • Every member must submit a beneficiary nomination form annually
    • Fund administrators must register with NAMFISA and -
      • The shareholders, every other person who controls the fund administrator, the principal officer, and other fund officers, and the directors of the fund administrator must meet prescribed fit and proper requirements
      • Must have relevant qualifications and experience
      • Have a fiduciary responsibility to the fund
      • Must avoid any conflict of interest
      • Must maintain proper records
      • Must employ adequately trained staff
      • Must maintain adequate financial resources for commitments and risks
      • Provide monthly reports on administration services to the board of the retirement funds

Important notice and disclaimer
This article summarises the understanding, observation and notes of the author and lays no claim on accuracy, correctness or completeness. Retirement Fund Solutions Namibia (Pty) Ltd does not accept any liability for the content of this contribution and no decision should be taken on the basis of the information contained herein before having confirmed the detail with the relevant party. Any views expressed herein are those of the author and not necessarily those of Retirement Fund Solutions.

 

 

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