Pension protection versus accountability: FIMA’s unintended consequences

The coming into force of Namibia’s Financial Institutions and Markets Act (FIMA) has ushered in one of the most significant reforms to the country’s financial sector in decades.

While much attention has rightly focused on its broader regulatory impact, one provision in particular has quietly altered the relationship between employers, employees and retirement savings.

Under the previous Pension Funds Act, employers who suffered losses through theft, fraud or dishonesty by employees could, under specific conditions, recover those losses from pension benefits. Such recoveries required either an acknowledgement of debt by the employee or a court judgment confirming liability. The principle sought to balance two competing interests: the protection of retirement savings and the rights of employers who had suffered financial harm.

FIMA has changed that balance.