Windhoek: Minister of Finance, Ericah Shafudah, has assured pension fund members and the public that existing retirement benefit commutation provisions remain unchanged despite the implementation of the Financial Institutions and Markets Act (FIMA) of 2021. Making a ministerial statement in the National Assembly, Shafudah stated that the proposed preservation regulation, which generated public concern during the FIMA reform process, has not yet been implemented.
According to Namibia Press Agency, the proposed regulation would have allowed a person changing jobs before the age of 55 to withdraw only 25 per cent of their retirement savings in cash, while preserving the remaining 75 per cent until retirement age. Shafudah emphasized that this regulation has been placed on hold pending further refinement and broader stakeholder consultations.
Shafudah further reassured retirement fund members that current retirement benefit commutation provisions remain in force. She highlighted that the existing provisions under the Income Tax Act of 1981 continue to apply, allowing individuals to commute up to one-third of benefits from pension funds, retirement annuity funds, and preservation funds as a cash lump sum, and receive up to 100 per cent of benefits from provident funds as a lump sum.
FIMA, which came into effect on 01 May 2026, marks the culmination of nearly two decades of policy development, legislative reform, stakeholder consultations, and institutional readiness. Shafudah noted that the legislation is expected to strengthen consumer protection, particularly for policyholders, pension fund members, and investors.
She underscored that FIMA ensures financial institutions operate transparently and treat customers fairly, while also improving access to financial services. The Act is set to provide greater regulatory clarity and certainty for the financial sector, thereby supporting investment, innovation, and long-term planning. The Namibia Financial Institutions Supervisory Authority will be responsible for implementing FIMA.