21 Nov 2021

The Ministry of Finance and Economic Development wishes to set the record straight, pertaining to an article that appeared in the Mmegi Online newspaper edition of Monday 15th November 2021, headlined “New Amendments will allow loans from Pensions”. 

A media release from the ministry says the article quotes Minister of Finance and Economic Development, Ms Peggy Serame, during the November 12 2021 Parliamentary session, as stating that. 

‘The Retirement Funds Act is being amended to allow pension fund members to get direct loans from their pension funds or to use part of the pension as security for mortgage loans”. 

The release says the ministry wishes to clarify that both the headline and introductory paragraph are misleading. 

It also says a more accurate statement is found later in the article as it explains that the matter was ‘one of the areas under consideration’ as part of the current review of the Retirements Funds Act. 

The release further states that pension funds are established to enable members to accrue funds, which will be used to sustain them during retirement. 

“Early withdrawal from the fund diminishes the future value of the pension savings and will have a negative impact on the earnings of the pensioner,” it says. 

 The release says therefore consideration for such a withdrawal requires extensive research and consultations throughout the financial sector, which the ministry is still to undertake. 

It further says members of pension funds and the general public are therefore advised not to contact pension funds or the ministry as the legislative review is ongoing and not yet final.  ENDS