The Social Security Commission of Namibia (SCC) terminated the post-retirement medical aid benefit for its employees in 2021.

The Commission found the benefit to be costly and unsustainable.

After engaging Octagon Actuaries & Consultants, the Commission was advised on four options, of which 92% of employees chose a cash payout of accrued benefits.

Other options recommended by Octagon Actuaries & Consultants included the transfer of an employee's benefits to a preservation fund, purchasing an annuity with an insurance company, or allowing eligible employees over the age of 55 to remain on the benefit.

But almost all the employees opted for cash.

Though this would cost the Commission millions of dollars, the employees' choice was subsequently approved by the Commission's Board last year.

Employees were thus provided with quotations of their benefits, ranging from N$100,000 to N$1 million, with the Executive Officer of the Social Security Commission informing the employees that the payments would be made on September 25, last year.

The date of the anticipated payment was however delayed after the employees were told that the Board had decided to refer the matter to the Minister of Labour, Industrial Relations, and Employment Creation, Uutoni Nuyoma.

The Minister has subsequently decided against the vote of the employees and has rather advised that the employees choose options two or three, which are to transfer their benefit to a preservation fund or purchase an annuity with an insurance company.

The Public Service Union of Namibia's (PSUN) Secretary General, Mathew Haakuria, is now accusing the Commission of causing low morale at the workplace and pushing its employees deep into financial debt.

"This decision of the minister to overrule the choice of employees has created a negative atmosphere at work with the potential of developing an undesirable organizational climate and culture. Employee wellness is a matter of concern as a number of workers are heavily indebted due to the non-payment, leading to a higher stress level, ill-health, and a demotivated workforce."

When approached for comment, the ministry said it acted in accordance with the statutory provisions that are designed to protect funds held by the Social Security Commission. The Ministry notes that the arbitration proceedings are open to the public.

It further said that the matter has been referred to the Office of the Labour Commissioner by one of the parties for arbitration, and therefore it would be inappropriate to comment on a pending hearing.