Outgoing young MPs face pension discrimination
Finance minister Ipumbu Shiimi is taking steps to address concerns regarding pension benefits for outgoing members of parliament (MPs), as the current regulations have been criticised for being unfair and discriminating against younger MPs based solely on their age.
In a meeting with MPs on Monday, Shiimi discussed amending the rules of the Members of the Assembly and Other Office-Bearers Pension Fund. He committed to initiating the necessary legislative and administrative processes to implement the suggested changes.
It is not clear if Shiimi’s proposed changes, which are not likely to be effected before the current parliamentary term ends next week, would benefit the current crop of outgoing younger MPs retrospectively.The meeting, which most of the outgoing young MPs attended, aimed to address disparities in pension benefits to ensure that all members are treated equitably, regardless of age. Age discrimination
According to a document obtained by Namibian Sun, following extensive deliberations, the meeting resulted in a decision to eliminate age-based differentiation in pension benefits.
Currently, benefits for members retiring from office are based on a hybrid system.
Members under the age of 55 do not receive a guaranteed 40% pension but only the employer’s contribution. In contrast, individuals 55 years and older receive both the employer’s contribution and a guaranteed 40%, even if they haven’t served a full five-year term.
A young MP, who wished to remain anonymous, described this rule as discriminatory.
The MP explained that the Members of Parliament and Other Office-Bearers Pension Fund Act, which was enacted on 4 January 2000, seems to have been designed with older MPs in mind, without considering the possibility of younger people serving in parliament.
The MP referred to the arrangement as “almost like a retirement home for pensioners” and criticised it as unfair.
Security for all
The MP explained that younger members often face more political exposure and challenges.
Despite these challenges, they are not afforded the same retirement benefits as their older counterparts. “It’s an unfair practice because political exposure is even more for young people, and they suffer as a result of this. Even at the bank, you can’t get an overdraft without proving that you are not politically exposed. So, we have it tough as young MPs. Yet when you retire, the benefits aren’t favourable. That is our bone of contention – that we should all get the same treatment,” the MP said.
Under the current system, retirement benefits payable to a member who has served for five years or more are calculated as a percentage of their pensionable salary.
For example, five years of service results in 40%, six years earns 45%, seven years yields 50%, eight years offers 55%, nine years provides 60%, ten years guarantees 65%, and eleven years or more grants 70%.
However, the MPs are now challenging the system, arguing that even those who serve for one year or less should be entitled to the same benefits.
During Monday’s meeting, Shiimi and the MPs reportedly agreed that all rules creating differentiation between members aged 55 and those younger should be eliminated. It was further resolved that pension benefits should be applied uniformly to all MPs, regardless of their age at the time of retirement.
The meeting also concluded that all MPs who retire at the end of their term should receive a guaranteed pension benefit, which is intended to ensure financial security for all members who have served in public office, irrespective of their age or years of service.
Reasonable system
Moreover, MPs are calling for a review of the existing rules governing pension benefits in cases of ill health.
They believe the criteria for qualifying under ill-health provisions should be reassessed to provide fair and adequate support for affected members.
The resolutions also include a review of the percentage of pension benefits paid out under various circumstances to ensure they are reasonable and reflect the contributions made by MPs during their tenure in office.
Younger MPs, particularly those under 55, feel that the current pension system creates a constitutional imbalance, as they would receive different benefits despite serving in the same parliament.
This flaw is further exacerbated by the fact that two MPs elected at the same time but of different ages would receive unequal benefits despite having the same length of service.
Another MP, who also preferred not to be named, said on Tuesday that they could not comment on the resolutions yet, as the decision still needs to be reviewed by auditors.
The MP emphasised that Shiimi cannot make the decision alone and must wait for input from the auditors, who will assess whether the changes are feasible and if sufficient funds are available.
“It would make me very happy if it is implemented. But I am not sure if that will happen. The minister (Shiimi) must still get feedback, and he can hopefully table it in parliament by next week,” the MP said.
At the time of going to print, Shiimi had not responded to questions sent to him.
[email protected]
In a meeting with MPs on Monday, Shiimi discussed amending the rules of the Members of the Assembly and Other Office-Bearers Pension Fund. He committed to initiating the necessary legislative and administrative processes to implement the suggested changes.
It is not clear if Shiimi’s proposed changes, which are not likely to be effected before the current parliamentary term ends next week, would benefit the current crop of outgoing younger MPs retrospectively.The meeting, which most of the outgoing young MPs attended, aimed to address disparities in pension benefits to ensure that all members are treated equitably, regardless of age. Age discrimination
According to a document obtained by Namibian Sun, following extensive deliberations, the meeting resulted in a decision to eliminate age-based differentiation in pension benefits.
Currently, benefits for members retiring from office are based on a hybrid system.
Members under the age of 55 do not receive a guaranteed 40% pension but only the employer’s contribution. In contrast, individuals 55 years and older receive both the employer’s contribution and a guaranteed 40%, even if they haven’t served a full five-year term.
A young MP, who wished to remain anonymous, described this rule as discriminatory.
The MP explained that the Members of Parliament and Other Office-Bearers Pension Fund Act, which was enacted on 4 January 2000, seems to have been designed with older MPs in mind, without considering the possibility of younger people serving in parliament.
The MP referred to the arrangement as “almost like a retirement home for pensioners” and criticised it as unfair.
Security for all
The MP explained that younger members often face more political exposure and challenges.
Despite these challenges, they are not afforded the same retirement benefits as their older counterparts. “It’s an unfair practice because political exposure is even more for young people, and they suffer as a result of this. Even at the bank, you can’t get an overdraft without proving that you are not politically exposed. So, we have it tough as young MPs. Yet when you retire, the benefits aren’t favourable. That is our bone of contention – that we should all get the same treatment,” the MP said.
Under the current system, retirement benefits payable to a member who has served for five years or more are calculated as a percentage of their pensionable salary.
For example, five years of service results in 40%, six years earns 45%, seven years yields 50%, eight years offers 55%, nine years provides 60%, ten years guarantees 65%, and eleven years or more grants 70%.
However, the MPs are now challenging the system, arguing that even those who serve for one year or less should be entitled to the same benefits.
During Monday’s meeting, Shiimi and the MPs reportedly agreed that all rules creating differentiation between members aged 55 and those younger should be eliminated. It was further resolved that pension benefits should be applied uniformly to all MPs, regardless of their age at the time of retirement.
The meeting also concluded that all MPs who retire at the end of their term should receive a guaranteed pension benefit, which is intended to ensure financial security for all members who have served in public office, irrespective of their age or years of service.
Reasonable system
Moreover, MPs are calling for a review of the existing rules governing pension benefits in cases of ill health.
They believe the criteria for qualifying under ill-health provisions should be reassessed to provide fair and adequate support for affected members.
The resolutions also include a review of the percentage of pension benefits paid out under various circumstances to ensure they are reasonable and reflect the contributions made by MPs during their tenure in office.
Younger MPs, particularly those under 55, feel that the current pension system creates a constitutional imbalance, as they would receive different benefits despite serving in the same parliament.
This flaw is further exacerbated by the fact that two MPs elected at the same time but of different ages would receive unequal benefits despite having the same length of service.
Another MP, who also preferred not to be named, said on Tuesday that they could not comment on the resolutions yet, as the decision still needs to be reviewed by auditors.
The MP emphasised that Shiimi cannot make the decision alone and must wait for input from the auditors, who will assess whether the changes are feasible and if sufficient funds are available.
“It would make me very happy if it is implemented. But I am not sure if that will happen. The minister (Shiimi) must still get feedback, and he can hopefully table it in parliament by next week,” the MP said.
At the time of going to print, Shiimi had not responded to questions sent to him.
[email protected]
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