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Contributed by Vincent Shimutwikeni, Manager: Legal Support Services, RFS Fund Administrators

Introduction

In Namibian law, creditors have multiple mechanisms at their disposal to enforce financial judgments. Among the most used are garnishee orders and maintenance orders. While both may involve third parties deducting funds owed by a debtor, their legal foundations, objectives, and treatment under
section 37A of the Pension Funds Act 24 of 1956 (“PFA”) differ significantly. This distinction becomes particularly critical when creditors seek to enforce orders against pension benefits, an area protected by strong statutory safeguards.

Section 37A of the PFA shields pension benefits from reduction, transfer, and execution except in limited circumstances. The provision reflects a policy objective to preserve retirement savings for their intended purpose. However, the law recognises that the needs of dependants may, in certain instances,
override this protection. This article explores how garnishee orders and maintenance orders are treated under this framework, with reference to relevant statutory instruments, case law, and practical implications for trustees and beneficiaries.

The Enforcement of Judgments: Garnishee Orders and EAOs

Section 65A of the Magistrates’ Courts Act 32 of 1944 provides creditors with the means to enforce monetary judgments against debtors who have failed to satisfy them voluntarily. These proceedings include emoluments attachment orders (EAOs), which compel an employer to deduct instalments from
the debtor’s salary or wages at source, and garnishee orders, which attach a debt owed to the debtor by a third party. While EAOs target regular income and operate continuously, garnishee orders are usually once-off in nature. A garnishee order is issued in terms of section 72 of the Magistrates’ Courts Act, read with Rule 47 of the Magistrates’ Court Rules. It is commonly used to attach specific sums held by third parties or amounts due in commercial transactions. Importantly, both types of orders require judicial oversight and are served on both the debtor and the third party. However, in practice, garnishee orders are often broader in target, while EAOs are more predictable in execution, particularly when a debtor is employed and earning a salary.


Maintenance Orders: A Different Legal Character


Unlike garnishee or emoluments attachment orders, maintenance orders arise from a statutory obligation to support dependants. The Maintenance Act 9 of 2003 governs the legal duty to maintain children, spouses, and, in some cases, parents. Section 16 of the Act empowers the maintenance court
to issue an order compelling payment if the person responsible has failed to provide adequate support.

The court may direct periodic payments, lump sums, or even payment in kind, depending on the circumstances. Enforcement of these orders can include deductions from a person’s earnings, including pension income. The rationale is that the right of a dependant to receive maintenance is of a higher
legal and moral standing than a creditor's right to recover ordinary debts. In Namibia, the relationship between pension benefits and maintenance obligations has been clearly defined through pivotal High Court judgments. These rulings affirm that pension funds, while generally protected by law, are not
immune from being used to satisfy maintenance orders.

Old Mutual Life Assurance Co Ltd v Old Mutual Staff Pension Fund & Another 1

This landmark case addressed the extent to which pension benefits are shielded from creditors. The High Court, under Maritz J, held that although the Pension Funds Act provides strong protection for pension benefits, such protection is not absolute. The Court emphasised that pension benefits cannot
be attached arbitrarily; any claim must comply with statutory requirements, including the timing of debt maturity. While the court ultimately prevented attachment in this instance due to the debt not being due, it recognised the overarching principle that pensions could be subject to claims in appropriate circumstances.

Section 37A of the Pension Funds Act: Scope and Limitations

Section 37A(1) of the Pension Funds Act provides that, subject to specific exceptions, no benefit provided by a registered pension fund may be reduced, transferred, ceded, or attached to satisfy a judgment or court order. This applies to annuities, lump sums, or any right in respect of contributions
made on behalf of a member. The provision is aimed at preserving retirement income and ensuring that pension benefits are used for their intended purpose, namely, retirement security.

However, the section also provides for three notable exceptions. Pension benefits may be reduced or attached:

  1. As permitted by the Pension Funds Act itself;

  2. Under section 24 of the Income Tax Act 58 of 1962;

  3. Under the Maintenance Act 9 of 2003.

The inclusion of maintenance orders in this exception highlights the law’s prioritisation of dependants’ needs over asset protection. The section also allows for up to N$3,000 per year to be taken into account in assessing a debtor's financial position under section 65 of the Magistrates’ Courts Act, but this amount is minimal and not a mechanism for attachment.

Application: Garnishee vs Maintenance Orders under Section 37A

The practical implication of section 37A is that garnishee orders, unless they fall within one of the narrow exceptions, cannot be enforced against pension benefits. A creditor seeking to use a garnishee order to recover ordinary debts from a pension fund will be barred from doing so.

By contrast, a valid maintenance order issued under the Maintenance Act may lawfully be enforced against pension benefits. This creates a clear legal distinction: while both garnishee and maintenance orders involve third-party payment redirection, only the latter enjoys privileged status under section
37A.

This hierarchy of rights reflects the policy objective that pension protection cannot operate to the detriment of dependants who have a legal right to support.

Conclusion: Guidance for Trustees and Fund Members 

The distinction between garnishee and maintenance orders is not merely procedural; it has serious legal and practical implications, especially where pension benefits are concerned. Section 37A of the Pension Funds Act establishes a strong presumption against the attachment of retirement funds, reflecting the law’s interest in preserving income for retirement. However, the section also permits limited exceptions, the most important of which is the enforcement of maintenance obligations.

Pension fund trustees must carefully evaluate the legal basis of any court order presented to them. If the order arises under the Maintenance Act, trustees are obliged to comply and facilitate deductions from the pension benefits. If, however, the order is a garnishee order or EAO for a general debt,
trustees must resist enforcement unless it falls within a statutory exception. Failure to make this distinction may expose the fund to liability or breach of fiduciary duty.

Beneficiaries, too, must understand that while their retirement funds are largely protected, they are not immune to valid claims for maintenance. Legal practitioners advising either party must ensure that enforcement efforts are directed through appropriate legal channels and within the bounds of section
37A. Ultimately, the provision balances protection of pension wealth with social responsibility, ensuring that the law does not allow one to shield assets at the expense of dependants’ fundamental rights.

  

Important notice and disclaimer
This article summarises the understanding, observation and notes of the author and lays no claim on accuracy, correctness or completeness. RFS 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 RFS. 

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