Introduction As the world progresses with improvements in
technology and medicine, today an average person
is expected to live longer than they did before. On
the other hand, the number of years where that the same
person can work and earn an income is limited. In Namibia
the normal retirement age is 60 years of age, although it has
been seen that an average person can live for many more
years after retirement. Since you will no longer be earning
an income from formal employment during the retirement
period, it is very important to save enough money during
working life to support yourself after retirement.
A pension fund is like a savings account that an employer sets
up to give you money something when you retire. Belonging to
a pension fund gives a member certain benefits. These benefits
are in the Rules of the Fund and are different from fund to fund.
Members should make sure that they get a copy of the Rules of
the Fund to know what benefits they are entitled to and when
they can be claimed.
Type of pension funds
A fund can be either a pension, provident, or a retirement
When can
members claim
pension benefits?
annuity fund. The main difference between a pension and
provident fund is that if you retire under a pension fund set up,
the member may only get one-third of the total benefit as a cash
lump sum and the other two-thirds is paid out in the form of
an annuity (usually a monthly pension/income) over the rest of
your life. A provident fund member can get their total benefit as
a cash lump sum and therefore gets control over how to use or
invest those funds on their own.
A retirement annuity is a product that is designed to accept
and grow funds from an individual and then, upon maturity of
the contract, pay out a stream of payments to you at a later point
in time (after retirement).
A preservation fund is a retirement fund designed specifically
to invest your pension or provident fund benefit once you have
withdrawn from the fund. You may transfer your benefits to a
preservation fund if you are dismissed, retrenched, or when you
resign.
When can you claim your benefit?
You cannot claim your fund credit (pension savings) for
reasons other than for the events that we shall discuss further
below.
You cannot claim your fund credit because you need money
urgently, for some reason like to put down a deposit for a car. If
your employer chooses to invest in a different pension scheme
and transfers all members pensions from the old scheme to the
new one through a section 14 transfer, as a member, you cannot
cash in your pension at this point either. A pension fund is not a
savings pocket where withdrawals can be made at any point in
time because it is meant to be a long term investment.
It is therefore not recommended to withdraw/claim your
