WINDHOEK, JAN 27 – GIPF has taken note of articles circulating on social media regarding the “death after
retirement” benefits offered by the GIPF, and more so as it affects members who are single at the
time of their death.
• Upon retirement (normal or early), a member receives a 1/3 tax free lumpsum while the
remaining 2/3 is used to buy an in-house monthly pension (annuity) which the Fund pays to
the retired member for the rest of his/her life. This pension is normally increased every year
to try and protect it from inflation.
• Regarding the death of the retired member, the Rules of the Fund states that the 2/3
retirement benefit of a retired member is guaranteed for a period of five years after
retirement. Meaning, should the retired member die within five years of retirement, the
monthly pension which was supposed to be paid to the retired member in respect of the first
five years of retirement will still be paid out as follows:
o If a single retired member dies within the guaranteed period, the remaining guaranteed
balance (five years pension) is distributed to the beneficiaries. Where there are no
beneficiaries, the money is paid over to the Master of the High Court for the benefit of the
member’s estate.
o If a married retired member dies within the guaranteed period, the remaining guaranteed
balance (five years pension) is paid out to the spouse. The surviving spouse receives
100% of the deceased member’s monthly annuity, and after the guarantee period, this is
reduced to 50% for life.
From the facts provided in the social media post, the member in question went on early
retirement at the age of 55. She received a 1/3 tax free lumpsum while the remaining 2/3 was
paid to her as monthly pension (annuity). The member in question earned a monthly pension for
18 years after retirement, in essence she received a promised life monthly annuity for an
additional 13 years after the guaranteed period.
A summary report of the total pensioners of the GIPF as per the latest actuarial valuation dated
31 March 2021 indicates that over two thousand GIPF pensioners are 81 years and older. Twelve
are 101+ years old, meaning the Fund has been paying them a monthly pension annuity for over
41 years since they went on retirement, and this benefit will be extended to their surviving
spouses for life, the day they pass on. If these pensioners were in another environment, this
prolonged support will not be possible.
The Fund takes cognizance of the wrong advice being circulated on social media that members
should resign to cash out their pension and or to transfer to a preservation Fund. Such advice
disadvantages members for the following reasons:
• Members will lose out on the “lifelong pension” benefit. This benefit is not available in a
preservation fund.
• Members lose out on the annual pension increases, also only unique to a defined benefit fund
such as the GIPF.
• Members lose out on the benefit of spousal income for life in the case of married members.
• Members lose out on the medical aid provision, which is a critical benefit for any retired
member. GIPF members only pay up to N$240 for a high premium per month which ensures
they have access to any private or public health facility country wide.
Resigning shortly before retirement has grave consequences for any member in terms of a
commission charged by financial advisors, getting fully taxed for the withdrawal amounts, and
carrying the administration costs in case of transfer to a preservation fund.
Members are advised to look at all the GIPF benefits holistically and not single out a certain
benefit. The GIPF also provides normal retirement, early age retirement, ill-health, disability,
death before retirement, death after retirement, retrenchment, funeral and resignation benefits.
Experience has taught us that more than not, members who resign shortly before retirement
hardly reinvest their pension pay out, which disadvantages the members and defeats the whole
purpose of a pension scheme in general.
Amidst COVID-19 realities and prevailing turbulent market performances, remaining within a
Defined Benefit Fund such as the GIPF is to a great benefit of members since they don’t carry the
investments risks and that their pension benefits are defined and guaranteed. – GIPF
