’GIPF Needs an Overhaul’

A review of the Government Institutions Pension Fund (GIPF) has found “a number of reasons why reform in the public serivce pension management in [the country] may have become necessary.” The reasons are contained in the discussion paper on the GIPF’s legal framework by the Law Reform and Development Commission (LRDC), published in December 2013.

The discussion paper found an “anomalous institutional status” of the GIPF as well as the “lack of government ownership and control over the management of GIPF” as some of the reasons to reform public pension management.

The paper lays the blame at the feet of the pre-independence administration, saying the decision of the colonial administration to privatise the predecessor of today’s GIPF “was certainly not in the interest of an independent nation.”

GIPF replaced the Statutory Institutions Pension Fund in 1989, a decision the LRDC says in retrospect was done out of fear that the new government at independence may use the pension benefits for other purposes.

The commission points out that the classification of GIPF as a state-owned enterprise “is factually and legally not correct,” as government has no control over the GIPF.

As such government is guaranteeing the benefits of GIPF members but has virtually no control over its contribution to the GIPF. Government’s intervention is limited when it wants to ensure fairness and the current status quo makes government “act as a rubber stamp of far-reaching decisions taken by the trustees.”

LRDC says in the discussion paper that “purely from a constitutional perspective, the reversal of the decision taken by the pre-independence administration can be justified as it would promote and maintain the welfare of the Namibian people.

Such an action should not be seen as a nationalism exercise, but merely as a measure to correct a serious and unintended political irregularity created by the pre-independence administration.”

GIPF is categorised similarly to the National Special Risks Insurance Association (NASRIA) and Meatco in which government has an interest – but is neither the majority shareholder nor has it established the institution (GIPF) through enabling laws.

The report stated that GIPF in essence is a private pension fund registered under the Pension Funds Act, 1956 yet underwritten by the government.

Source : New Era