Query: Who can benefit from GIPF and what are these benefits?
The Government Institutions Pension Fund (GIPF) is a defined benefits pension fund that provides guaranteed pension benefits to its members. The fund is open to all government employees or employees of participating institutions in Namibia.
Pension benefits are as follows:
The normal retirement age is 60. Upon retirement, the member will receive a lump sum of one third of the total pension tax-free. In addition, he/she will receive a taxable monthly income (if in excess of N$24,000 per annum) for life. The pension benefits payable are based on the final salary of the employee and years of service. The first payment of the pension is made at the end of the first month of retirement.
Should an employee wish to go on early retirement, he/she has to seek approval from the employer. The employee must be at least 55 years of age to go on early retirement. The formula used is the same as when a person retires at the age of 60, but the pension amount is reduced for every month the employee falls short of the normal retirement age, which is 60 years.
When the employee resigns or is dismissed from service they have the following options:
1. Take the benefit in cash (the benefit will be taxed);
2. Transfer the benefit to new employer’s pension fund;
3. Transfer the benefit to an approved retirement annuity;
4. Transfer the benefit to an approved preservation fund;
5. Keep the benefit within the GIPF if he/she has been a member of GIPF for an uninterrupted minimum period of 10 years. The member will get his/her accrued benefits based on age, salary and service period.
Employers decide to retrench their employees when they reduce the size of their workforce due to financial constraints or to promote efficiency. Retrenched members are entitled to a service bonus that is paid by the employer. The benefits are calculated in the same manner as normal retirement benefits, plus the shortest of the following periods; 1/3 of service period of the employee, the difference between real date and actual date of retirement and a period of 5 years.
Employees who suffer from diseases, such as cancer, stroke, total blindness and heart problems qualify for a disability benefit. Although their services are terminated, they remain full members of the Fund; they contribute to the Fund and qualify for death and funeral benefits, like any civil service employee. The benefit they receive is a disability income that is equal to 75% of the latest salary of the employee.
Employees who suffer from continuous illness can be put on ill-health retirement. To qualify for this benefit the employee has to be assessed by the Medical Board, whose members make recommendations to the Public Service Commission about the condition of the employee. A retiree on ill health will receive a pension calculated in the same manner as normal retirement. The difference between the two benefits is that the service period in the event of ill health could be shorter.
Should an employee die before retirement, GIPF will pay out a tax-free lump sum of twice the final annual salary of the deceased employee. The qualifying spouse would receive a pension equal to 40% of annual salary for life and the children will receive a monthly income of up to a maximum of 30% of the annual salary for a maximum of 3 children. If the member was single, but had children, they will receive up to a maximum of 60% of the annual salary. The Trustees recognise traditional marriages, provided that they are verified by an affidavit issued by a traditional leader. Qualifying children include biological, legally adopted, stepchildren, disabled children and students. Should the pensioner die within the first 5 years (called the guarantee period) after retirement, the spouse will receive a pension equal to the amount that the deceased pensioner was receiving. This amount will be reduced to 50% once the guarantee period expired. If the pensioner had no dependants, the pension to be paid in respect of the guaranteed period will be paid into his estate. If a pensioner dies after the age of 65, the spouse will receive 50% of the amount that the pensioner was getting. In cases where the member had no children or spouse, the pension will cease.
GIPF provides a funeral benefit as a lump sum to assist members with family funeral costs. This benefit is provided to members at no additional cost. The amount paid ranges from N$500 for children under one year to N$5,000 on the death of the member or spouse.
Query: How much would I, as GIPF member, have to pay and how do I make payments?
Response: Once you become a GIPF member, you will contribute 7% of your monthly basic salary and your employer will pay an additional 16%. This monthly contribution is deducted directly from your salary and appears on your payslip.
– Robyn Nakaambo, external stakeholders’ engagement officer at GIPF, email: email@example.com