Rule tweaks to unlock GIPF’s real value

The market value of the Government Institutions Pension Fund (GIPF) has grown substantially since 2011 when it was valued at around N$46 billion, to N$75 billion by the end of March this year. The country’s largest pension fund last week held its annual stakeholders consultative meeting in Windhoek, where it shared its latest investment plans and performance. The organisation said its regional asset allocation is split in four - with 35% in Namibia and 28% held in South Africa. Another 8% is held in the rest of Africa, adding to the 29% held elsewhere internationally. Updating the public on the performance of its unlisted investments, the Fund cited a total commitment of N$2.380 billion. That includes an amount disbursed to date, of N$1.108 billion. The importance of the GIPF’s investing into unlisted assets is linked to government’s recent amendment of the Pension Funds Act (Regulation 28) - which requires funds to invest up to 35% of its assets in unlisted entities within the country. Thursday’s gathering also saw the GIPF announce a number of amendments to its rules, currently being amended between itself and the Public Service Management Department. These include introduction of the fund’s long-anticipated pension-backed home loan scheme, new governance principles in line with the South African King III Report on Corporate Governance, and the merging of its ill-health and disability benefits into a single benefit. GIPF chief executive officer David Nuyoma said current rules only allow for a mortgage-backed scheme, which qualifies as property investments. “The second category is referred to as a pension-backed home loan for which pension is ceded as guarantee,” Nuyoma said. “This last category is yet to be introduced upon the amendments of the Pension Funds Act and the rule amendments currently underway. If these amendments are ratified, members residing in unproclaimed areas will be able to participate and the fund will be duly authorised to enter into this line of activity respectively,” he said.