| Provision |
Proposed design |
| Coverage |
All employed persons in the formal sector (Mandatory), including civil servants. Covers only service after the inception date.
Options:
Mandatory coverage for the informal sector |
| Pension formula |
1.33% of each year’s insurable earnings, revalorised until
retirement, based on the increase in the average insurable
earnings of all NPF members
Options:
1.50%, 1.75%% and 2.00% |
| Normal Retirement Age |
Pension payable without reduction from age 60
Options:
58, 62 and 60 adjusted in the future based on an increase in life Expectancy. |
| Early Retirement |
Possible from age 55 with a pension reduced 6% per year of early Retirement. |
| Death after retirement |
The pension will be discontinued, and a % of the pension will be paid to the survivors. 50% if 1 dependent, 75% if 2 dependents and 100% if 3 dependents or more. If one of the dependents is the spouse, 50% goes to the spouse, and the other dependents share the rest equally. |
| Death before retirement |
Pension to survivors = Accrued pension at time of death multiplied by the following ratio: (Years of contribution at death + 60 – age at death) / Years of contribution at death 2 |
| Disability before retirement |
Pension is calculated in the same manner as the survivor
pension in case of death before retirement. |
Minimum number
of years of contribution for entitlement to a pension |
Retirement pension: 15 years of contribution to the NPF. Disability and survivors’ pension: 5 years of contribution to the NPF.
If not entitled to a pension: lump sum = 6.25 time the accrued pension
Options:
Retirement pension: 0 and 10 years |
| Minimum pension |
For Retirement, Disability and Death: N$ 500/month after 30
years of contribution, 60% of that amount, with only 10 years of contribution (0% before that), + 2% per additional year of
contribution, up to 100% after 30 years.
In case of retirement before age 60, reduced in the same way as for early retirement.
Options:
None, N$ 750, N$ 1,000 |
| Funeral benefit |
None
Option:
N$10,000 |
| Indexation of pensions in payment |
Retirement, disability, and survivors’ pension are indexed every year based on the increase in Consumer Price Index (CPI). If the increase in CPI exceeds 7%, indexation is capped at 7% and the excess will be granted in later years when the CPI increases will be less than 7% (However, pensions which are lower than the full minimum pension always indexed at full CPI)
|
Initial past
service credits |
None
Option:
Yes, for members above age 45 at inception
|
Insurable
earnings ceiling |
None
Options:
N$ 9,000, N$ 12,000 and N$ 15,000
|
| Insurable earnings general exemption from contribution |
No employees’ contribution on earnings below N$ 300/month.But earnings below N$ 300 are considered for calculating the Pension.Options:0, N$400, N$ 500 |
| Contribution rate |
Based on actuarial valuation: 15.91% to be shared between workers and employers. Suggested add-ons available to members of the NPF. |
| Suggested add-ons available to members of the NPF |
Savings
component |
Members would be offered the possibility to save in an individual accountaccount for up to 3% of their insurable earnings (1.5% mandatory employer and 1.5% voluntary by workers).Options:1) Reduce the accrual rate from 1.33% to 1.00% in the pension component to finance the savings component.2) Allow commuting 1/3 of the pension at retirement, in addition to or in replacement of the savings component. |
| Loans component to NPF members |
A portion of the NPF reserve (5.0% to 7.5%) would be dedicated to loans to NPF members, prioritising NPF members with earnings below a given level. |
| Savings & Loans Facility |
Setting-up a Savings & Loans Facility with access limited to the NPF members |