By Vincent Shimutwikeni. *
Namibia is not debating whether retirement security matters. It is debating how best to build it. A pension system is more than a payroll deduction; it is a social contract between generations. The question is whether the architecture we choose will work for Namibia.
The National Pension Fund (NPF) is not a new idea. The Social Security Act 34 of 1994 provided the legal foundation for an NPF, yet Part VII has never been operationalised. More than three decades later, the objective remains compelling: ensuring that Namibians do not reach old age without an income.
The need is real. Namibia’s 2023 Population and Housing Census Labour Force Report recorded 546,805 employed people from a labour force of 867,247, with an official unemployment rate of 36.9%. Including discouraged jobseekers, the broader measure rises to 54.8%. The coverage challenge is therefore also a labour-market challenge. Informal, seasonal and low-income workers are ultimately the people a national scheme must reach.
The Social Security Commission (SSC), with technical assistance from the International Labour Organization (ILO), has laid important groundwork. But international standards should guide the process, not replace the need for a system designed around Namibia’s realities.
The proposed model:
The model under discussion is an earnings-related, defined-benefit social-insurance scheme. Formal-sector workers would participate compulsorily, while informal and self-employed workers would initially participate voluntarily. It targets a pension of about 40% of pre-retirement earnings after 30 years of contributions and provides old-age, disability and survivors’ benefits.
The actuarial design estimates a combined employer-employee contribution of 15.91%, with the final split still to be agreed. An earnings ceiling around N$15,000 has also been considered.
Adequacy cannot be separated from affordability. Compulsory contributions create costs for employees and employers, particularly SMEs, and could affect hiring and formalisation if introduced too abruptly. Phasing therefore deserves consideration.
Canada offers a useful lesson. When the Canada Pension Plan commenced in 1966, employers and employees each contributed 1.8% of pensionable earnings. The rate increased as the scheme matured. Namibia could similarly phase contributions toward their eventual level.
Namibia is not starting from zero:
At the end of March 2026, Namibia’s retirement-fund industry held approximately N$301.9 billion in assets for more than 429,000 members. This demonstrates the scale of the existing retirement-savings system.
Most occupational schemes are defined-contribution arrangements, while the proposed NPF is defined benefit. They need not compete. The NPF could provide a social-insurance floor for old-age, disability and survivor protection, while occupational funds provide supplementary retirement savings.
The legal framework should therefore allow coexistence through exemptions for qualifying occupational schemes or integration through a smaller, actuarially determined NPF contribution. Either approach must be actuarially tested and clearly legislated.
International standards, Namibian choices:
ILO Convention No. 102 on Social Security (Minimum Standards) provides an important benchmark. Namibia has not ratified the Convention, but the proposed NPF has been assessed against principles including coverage, adequacy, qualifying periods, collective financing, disability, survivors’ protection and governance.
The model broadly aligns with these principles, including its 40% replacement-rate target after 30 years of contributions. Article 95(d) of the Namibian Constitution also provides a basis for considering international standards in social policy.
Convention No. 102 should inform Namibia’s choices, not dictate them.
Where are we now?
The SSC engaged the ILO in 2020 to develop the pension design and governance framework. The actuarial design was completed in 2021; stakeholder engagements followed in 2022–2023; government approved the ILO design for implementation in 2024; and NPF governance-framework principles were agreed in October 2025.
However, policy, legislation and regulations are not yet final. The current design report is based on data as at December 2019 and requires an updated actuarial valuation and policy review. Key outstanding issues include the contribution split, earnings ceiling, past-service credit and exemption or transition arrangements for existing pension members.
Tripartite engagements with the ILO are planned for September 2026, followed by further stakeholder engagements.
The way forward should be to build a Namibian NPF, not simply import an international model. Contributions should be phased where appropriate; informal and low-income workers considered; accrued rights protected; and qualifying occupational schemes allowed to coexist. Strong governance, professional management, independent actuarial oversight and regular valuations will be essential.
We should not choose between universal pension protection and a strong private retirement industry. We should build a system in which the two reinforce each other. The ultimate test is simple: Can a Namibian worker, formal or informal, permanent or seasonal, reach old age with dignity, while employers can still afford to employ?
That is the NPF Namibia needs: universal in ambition, prudent in design and unmistakably Namibian.
* Vincent Shimutwikeni – Retirement Funds Author and Pension Industry Professional is the Manager: Legal Services at Retirement Funds Solutions.
