Regulatory Alerts2026-07-08
Added
PI-PF-04-2003 – Voluntary Termination
The Namibia Financial Institutions Supervisory Authority declares the voluntary dissolution of a participating employer within an umbrella scheme illegal and orders it to cease with immediate effect. Principal officers of umbrella schemes, pension funds, and administrators must instead utilize a section 14 transfer to move the employer to a preservation fund or another pension fund organization. If the employer is no longer in business, normal withdrawal benefit calculations must be followed, and payments to member-employees may only occur once the business entity has ceased and the employment relationship has stopped.
NAMFISA NAMIBIA FINANCIAL INSTITUTIONS SUPERVISORY AUTHORITY
- Safeguarding the Nation's Wealth! - Enquiries: Ms. G. Gaoses
17 June 2003
CIRCULAR: PI/PF/4/ 2003
ALL PRINCIPAL OFFICERS OF UMBRELLA SCHEMES ALL PRINCIPAL OFFICERS OF PENSION, PROVIDENT, RETIREMENT FUNDS AND RETIREMENT ANNUITY FUNDS ALL PENSION FUNDS ADMINISTRATORS & CONSULTANTS
SUBJECT: VOLUNTARY TERMINATION OF PARTICIPATING EMPLOYER UNDER AN UMBRELLA SCHEMES
OBSERVATION
-
In terms of the Pension Funds Act the umbrella fund is the pension fund organization registered with the Registrar. The participating employer is merely one member of the fund and therefore does not constitute a separate legal entity. Section 28, Voluntary Dissolution of Funds, provides that it is only the registered fund, the legal entity, which may voluntarily be dissolved.
-
Therefore, the practice of voluntarily dissolution of participating employer is not only undesirable; it is illegal and should cease with immediate effect.
-
The correct procedure may be a section 14 transfer of the participating employer out of the umbrella scheme to either a preservation fund or another pension fund organization. If the employer is no longer in business, the normal procedure of calculation of withdrawal benefit should be followed and then there can be a termination of the employer out of the fund.
-
It follows that only if the participating employer is no longer a business entity and the employment relationship between the member and that employer has stopped, any payments to the member-employees may take place.
-
The aim of this circular is to give guidelines to the industry regarding the voluntary termination of a participating employer in an umbrella scheme. The guidelines are as follows:
a. Fully disclose the reason (s) why the voluntary termination exercise of the participating employer is taking place.
• P.O. Box 21250 Windhoek NAMIBIA • 154 Independence Avenue • 8th Floor, Sanlam Centre • Tel: (+264 61) 290 5000 • Fax: (+264 61) 256303 • E-Mail: info@namfisa.com.na