Rössing offers voluntary separation packages this year

Sharlien Tjambari

IthasbeenconfirmedbyRössingUraniumnoemployeeswillberetrenched,after the announcement of the Life of Mine Extension (LoME) of Rössing Uranium, rumours that the mine will lay off some of its employees by 2026 started making rounds.

Managing Director, Johan Coetzee told the Namib Times in a telephonic interview,“RössingUraniumemployees are not being retrenched; however, followingtherecentlyannouncedLifeof MineExtension(LoME)bytheBoardon 22 February 2023, the recommended operating model will have an impact on someoftherolesafter2027.”

According to Coetzee, the LoME does not guarantee the continuation of all current jobs beyond 2026, as the operatingmodelandworkforcestructure required for LoME is different. “The contractor mining solution for LoME is regarded as the most appropriate based onthemostresilientfinancialoptionand istheonlynon-valuedestructiveoption.” Coetzee further said, “Rössing is therefore not retrenching employees but is offering Voluntary Separation packages to those employees in the impacted areas, starting 2023 until the endof2026.”

Coetzee further mentioned that the transition plan created for the voluntary separation program is aimed at mitigating the impact of potential forced retrenchments post-2027 by affording every impacted employee the opportunity to benefit from the voluntary separation package offered by the company while pursuing other employment opportunities. TheapprovalofLoMEmeanstheminewill continuetooperateforanextended10year period until end of 2036. The alternative would mean mine closure at the end of 2026, where all Rössing employees would beimpacted.Coetzeesaid,“thegoodnews is that employment and other macroeconomic benefits will continue to exist at Rössingbeyond2026.”

Rossing's Life of Mine Extension (LoME) hasbeenextendedfrom2026to2036,this comes after the bankable feasibility study was conducted by the mine, which the boardapproved.

Put Money Aside For Your Retirement

IfoneweretoaskanordinaryNamibianwhattheyweredoingwiththeirleftover cashattheendofthemonth,theymightjustlookatyouwonderingonwhatplanet youareandwhichbustheyhadmissed.

After a few years of economic downturn and large-scale retrenchments, discretionary income is possibly almost non-existent after average Joe has paid for the necessary cost-of-living expenses,andpossiblysupportedhisorhernextof-kin with buying their groceries and covering otherexpensestoo.

“However,itbegsthequestionastowhetherone should not for a short moment consider the implicationsofnot“payingoneselffirst”,saysMr Enwich Kazondu, principal officer of the Namibia Building Workers Pension Fund (NBWPF). “It is really important to put money aside for when one is retired, even if it is just a littlebit”.

Without any provision for retirement, it would make it very difficult for most to maintain their standard of living once they are retiring. In the financialservicesindustry,oneoftenreferstothe 80 percent rule, which practically means that ideally one should have enough retirement savingsthatallowonetohaveamonthlyincome availablethatwouldbebetween80and85percent ofwhatoneisearningpre-retirement.Thatwould mean, that if one's monthly income was NAD5000beforeretiring,thenonewouldhaveto have between NAD4000 and NAD4500 per monthatone'sdisposalduringretirement.

“Considering that the old age pension for citizen over 67 in Namibia is NAD1100 per month, it is therefore critical, that everyone plans effectively andbuildsalargeenoughnestegg,toavoidthat being left destitute and vulnerable at the end of theirworkinglife,”saysMrEnwichKazondu.

“However, we know there is a degree of scepticismaboutputtingmoneyasideandpaying into pension funds. This possibly has to do with the previously announced legislation which had stipulated that 75% of benefits required to be preserved until after retirement. However, this is not enforced. On the contrary, members of the NBWPF can indeed have their fund credit paid out if they resign or are retrenched, which howeverwouldhavetaximplications.

“Atthesametime,theremightbeagenerallackof understanding of the benefits of paying into a pensionplan.Ontheoneside,ifthepensionfund is provided through an employer, the employer would have to match the employee's contribution and no tax would have to be paid on this contribution, as they are deducted before being taxedonone'ssalary.”

“InthecaseofNBWPFfortheconstructionsector, the employee pays 4% of his or her pensionable salary and the employer makes an equal contributionof4%.

Therefore, it is important to recognise that this benefit increases the value of one's overall package”.

Regardless, there are some who feel that their moneyisnotsafeandthattheyprefertohavemuch easier access and oversight. Some pension funds, globally, fell also into disrepute due to their underlying investment decisions that were not prudent. However,thatshouldnotunderminethe principal value of making use of pension funds to makeprovisionsforone'sretirement.

Nevertheless,ifthediscretionaryincomeislimited andmanagingone'sdailylifebecomesabalancing act,thefirstthingmightstillbetoputsomemoney aside in the case of emergency into a so-called emergency fund, and to pay off any high interestbearingdebts.

“Weneedtoreallybecomemoreawarenotonlyof ourcurrentfinancialneedsbutalsoaboutwhatwe can expect our spending needs to be in the future, when we are no longer earning an income. It is reallyatoughcalltomake,consideringourcurrent economic environment. But we always need to remember,itisnevertoolatetostartputtingmoney aside.Atthesametime,thesooneronestarts–even very early in one's work life - the better, as the benefits of compound interest over the years, will dotheirwork.

“Yes, we are also aware that pension fund contributionsarenottheonlywaytomakesurethat one has enough to live comfortably when one retires. Although pension funds are an optimal vehicle for what one aims to achieve, there are otheroptionsaswell,butthesearebesttobepartof an overall personal financial strategy, and it may wellbeprudenttoseekadvicefromanindependent financialadvisor”.