A GLANCE AT NAMIBIA’S RETIREMENT SECTOR Presented by: Elvis Nashilongo Chairman: GIPF Employees Pension Funds, Namibia 06 July 2015

TABLE OF CONTENTS INTRODUCTION SNAPSHOT ON NAMIBIA’S RETIREMENT SECTOR SIGNIFICANCE OF RETIREMENT FUNDS ISSUES OF SIMILARITIES REGULATORY ENVIRONMENT PLANNED INDUSTRY OVERHAUL COMMON CHALLENGES CONCLUSION

INTRODUCTION The purpose of this presentation is to share information with regard to the status of retirement funds in Namibia. Thus creating continental engagements on Common approaches Uniformity of Retirement reforms Share innovation and solutions Promote African integration agenda

SNAPSHOT ON NAMIBIA’S RETIREMENT SECTOR Namibia regard social security as a fundamental human right. The sector is segmented into contributory and non-contributory benefits There is about 111 registered contributory Pension schemes in the country It has over N$117 billion under management Serves as backbone of the financial services industry Key to capital market growth and development Shift of focus to mere benefits provision to include developmental investing

IMPORTANCE OF RETIREMENT FUNDS Consumption smoothing Social safety and security net (Insurance) Redistribution of income Development and stimulation of financial sector

ISSUES OF COMMON SIMILARITIES Namibia shares a unique history with S.A. Laws governing the industry are inherently similar As a result of economic linkages, industry reforms are reciprocal in nature Citizen share similar socio-economic background Both industry share from a pool of professional service providers

REGULATORY ENVIRONMENT Current Instruments include – Pension Funds Act (Act No. 24 of 1956) Inspection of Financial Institutions Act (Act No. 38 of 1994) Income Tax Act (Act No. 24 of 1981) Namibia Financial Institutions Supervisory Act (Act no.3 of 2001) Financial Institutions Investment of Funds Act (Act No. 39 of 1984) Directives and Circulars Recent Reforms include - Amendments to Regulation 28, which requires 35% of total assets to be invested in the local economy Regulation 29, which requires registration of SPV’s and Unlisted Investment Managers Amendment to Regulation 27, which reduced interest rate on members housing loans. Regulation 26, introduces daily penalties for non-submission of required information

PLANNED INDUSTRY OVERHAUL Pension funds Act of 1956 to be replaced by Financial Institutions and Market Act. FIM Bill is now at advanced stage and once enacted it will: -Consolidate, update and amend legislations that govern non-banking financial services. -Place more emphasis on roles and duties of trustees and management -Enforce the shift from compliance based to risk based supervision. -Promotion of self-regulation

COMMON CHALLENGES Out-dated regulatory environment Complexities in complying with existing laws Fragmentation of laws in the non-banking financial services sector Administrative challenges in pension distribution Challenges related to governance Uncertainty due to regional and global market volatility Growing liabilities and increasing stakeholders’ expectation The need to optimize members’ benefits

CONCLUSION We believe that continental dialogue on retirement reform is necessary and long overdue. Namibia is prepared to share her experience while taping from regional, continental and global best practices. The effort of the IRFA to promote this dialogue should be applauded. THANK YOU