Martin Endjala
The construction industry is among some of the most neglected industries when it comes to retirement investment given the model of its work and as a result, many self-employed businesses find it hard to join retirement pension funds.
It is against this background that the Establishment of the Namibian Building Workers Pension Fund (NBWPF) was created on 1 March 1990 to minimize this gap that has been excluding the construction sector for some years.
After applying for the rule amendment which was approved in October last year, by the registrar of pension funds under the auspices of the Namibian Financial Institutions Supervisory Authority, it now allows for higher-level monthly contributions from both the members and their employers.
The NBWPF’s Principal Officer, Enwich Kazondu during a business engagement held yesterday in Windhoek, monthly member contributions were previously restricted to a rate of four percent of their salary, however, this has changed, and the rule amendment allows a monthly contribution higher than four percent.
This means that the fund can now accommodate both employer and member contributions. The changes are to ensure a minimum match between the two.
The new rule stipulates that the employer shall make a minimum monthly contribution in respect of each member equal to four percent of the member’s salary or a higher specified rate as set out in the special rules.
The rules further state that a member shall contribute monthly to the fund at a minimum flat rate percent of this fund salary or such a higher specified rate as set out in the special rules.
With these changes in place, which no longer restrict the level of contribution, Kanzondu reiterated that employers can now improve their employees’ remuneration package, by increasing the contribution to the employees’ pension fund.
“Besides contributing towards the employees’ long-term social protection, it is also important that employers take note that these contributions are tax deductible expenses for their businesses,” said the Principal Officer.
The new change also means that the scope has been widened by who would join. The amendment is said to speak to those employers that would like to find a pension in the industry that looks at the needs of the entire spectrum of their employees, across the board.
“For all so-called categories of employees, there is now a place with us to build their retirement savings, that allows for the streamlined approach and far easier pension fund administration which is favoured by our contributing employees,” stated Kandozu.
NBWPF’s current asset value stands at N$281 million, with over 2 000 actively paying members. The fund has embarked on an informative campaign, aimed at bringing on board businesses that are not only in the construction sector but also other professions and sectors closely aligned to the construction sector such as power and energy, architecture and artisan.
He emphasized the importance to put money aside when one retires even if it is just a little bit, adding that any provision for retirement, would make it very difficult for most to maintain their standard of living once they are retiring.
In the financial services industry, one often refers to the 80 percent rule, which practically means that ideally, one should have enough retirement savings that allow one to have a monthly income available that would be between 80-85 percent of what one is earning pre-retirement.
That means that if one’s monthly income was N$5000 before retiring, then one would have to have between N$4000 and N$4500 per month at one’s disposal during retirement.
In addition, the Construction Industry Federation Chief Executive Officer, Barbel Kirchner said that they want to see Majority-Namibian-owned businesses get contracts both in the private and public sectors.
She said that it is not only important for job creation, maintaining and building capacities in the industry, but also in view of effective contribution to government revenues as well as building a future safety net at the point of retirement for those working in the sector.
