Namibia deliberates National Pension Fund architecture

Namibia is currently deliberating the architecture of a National Pension Fund (NPF) to ensure retirement security for its citizens. Although the Social Security Act 34 of 1994 established the legal foundation for an NPF, the relevant provisions have remained unoperationalized for over three decades.

The proposed model is an earnings-related, defined-benefit social-insurance scheme. Under this plan, formal-sector workers would participate compulsorily, while informal and self-employed workers would initially join on a voluntary basis. The scheme aims to provide a pension of approximately 40% of pre-retirement earnings after 30 years of contributions, alongside old-age, disability, and survivors’ benefits.

Actuarial designs suggest a combined employer-employee contribution rate of 15.91%, with an earnings ceiling of approximately N$15,000 under consideration. The Social Security Commission has been working on the groundwork with technical assistance from the International Labour Organization (ILO). The initiative faces challenges related to Namibia’s labor market, where the official unemployment rate stands at 36.9%, and the need to reach informal and low-income workers.