Stefanus Nashama
The Namibia Financial Institutions Supervisory Authority (NAMFSA) announced that the institution will ensure pension benefits will be distributed to the beneficiaries of deceased Pension Fund members, as stated by the Pension Funds Act.
The process required to be followed by pension funds on the manner of distribution of the benefits following the death of a member. This entails tracing dependents and nominees of members, said NAMFISA Spokesperson, Victoria Muranda in a media statement.
Muranda indicated that should the Pension Fund fail to trace any dependents or nominees within a period of 12 months, the balance in the fund in relation to that member will be paid to the member’s estate. Where a dependent who received a benefit from a Fund after the death of the original member of the Fund also passes on, the Fund Rules must provide for how that survivor’s benefits will be dealt with, should any benefit remain.
The Fund rules are the constitution of a Pension Fund, which provide details on how a Fund will operate, including the nature and extent of all fund benefits, she said.
Muranda also explained the Funds would make Rules amendments after obtaining the approval of the Registrar of Pension Funds if the Rules are not inconsistent with the Pension Funds Act.
“The Registrar cannot approve any Rule amendment which is contrary to the provisions of the Pension Funds Act. Funds are required to communicate the impact of any Rule amendment that may have an impact on member benefits to its members prior to submitting an amendment to NAMFISA for approval,” she stated.
She added NAMFISA reviews member communications to ensure that implications have been properly communicated to members.
Muranda also indicated that likewise, the Financial Institutions and Markets Act, 2021 (Act No. 2 of 2021) (FIMA) sets out a process to be followed for the distribution of benefits after the death of a member.
She said FIMA further expands on the protection of the benefits available for the survivors or dependents of deceased members. FIMA expressly prohibits benefits from forming part of the estate of a deceased member unless a thorough process has been followed to trace any children, parents, siblings, dependents or nominees of deceased members for a period of at least 12 months.
“FIMA further requires members to annually review and submit to the Fund the nomination form to provide details of any potential beneficiaries to make the process of tracing dependents and nominees more efficient.
This process aims to protect the interest of the survivors of deceased members and to ensure that their benefits remain protected, Muranda said.
“Should members have any queries concerning their rules, the same can be raised with their respective pension fund Principal Officer or Trustees. In addition, if members are aggrieved by any action taken by their Fund, they may lodge a complaint with NAMFISA,” she stated.
Muranda said FIMA consolidates and harmonizes the laws regulating the non-banking financial sector to address deficiencies identified in the current legislation, such as a lack of adequate consumer protection framework, lack of powers to enforce the fair treatment of consumers, lack of powers to ensure financial inclusion, public awareness on financial services, and encouraging innovation, entrepreneurship, and financial stability.
“FIMA fosters the protection of the interests of consumers of financial services while empowering NAMFISA to raise public awareness about financial services while holding regulated entities and key individuals accountable,” Muranda indicated in the statement.
She further emphasised that FIMA empowers NAMFISA to regulate behaviour of financial institutions and financial intermediaries to uphold the highest standards of business conduct while imposing an obligation to ensure that communications between service providers and consumers are written in plain and simple language.
Pension Fund members are advised to read their Pension Fund rules, attend meetings called by the Fund and familiarize themselves with their rights and responsibilities.
NAMFISA encourages the public to look at FIMA holistically and appreciate the benefits FIMA will bring.
