Payment of Pension Fund Benefits: What You Should Know

Do You Know What Happens to Your Pension Benefit When You Leave a Job or Pass Away?

Many employers offer retirement benefits to their employees through a retirement fund. In simple terms, a retirement fund is a long-term investment vehicle that provides an income upon retirement. Monthly contributions from both the employee and employer are invested in various assets over the course of the employee’s working life. At retirement, this accumulated amount is used to purchase an annuity that pays a monthly income.

However, there are circumstances where this benefit may become due before retirement age. In this article, we focus on two such situations and how they should be handled:
When an Individual Leaves the Company
If you leave your job, you are still entitled to the benefits accumulated in the retirement fund during your employment. In most cases, this benefit can be:
Unfortunately, many people do not claim these benefits, which then become unclaimed benefits. These must be disclosed in the fund’s annual financial statements and form part of the fund’s liabilities, creating administrative and financial burdens.

As of 31 December 2012, the Namibian retirement fund industry reported over N$130 million in unclaimed benefits. These are amounts still owed to individuals who simply never claimed them—often because they cannot be traced.

If you previously worked for a company that offered a pension benefit and never claimed it, contact the HR department of your former employer. Also, regularly check major newspapers for public notices listing unclaimed pension benefits.
When an Individual Passes Away While Employed
Life is unpredictable. That’s why it's essential to have your financial affairs in order, including your pension fund. One crucial document is the beneficiary nomination form, which you must complete when joining a fund. This form guides the fund in distributing your benefit after your passing. There are three categories of potential beneficiaries:
If your nomination form is outdated or incomplete, the fund must conduct a detailed investigation to establish who your rightful dependents are. This can cause delays at a time when your loved ones may desperately need financial support—especially if you were the household’s sole provider.

Review and update your beneficiary nomination form annually, especially after major life events like marriage, divorce, or the birth of a child.
Take Action Now!
While NAMFISA is responsible for ensuring a safe and sound financial sector, the success of this mandate also depends on:
For more information on pension-related matters, contact NAMFISA’s Corporate Communication Manager or the Pension Fund Department at: 061-290 5000
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