The Issue
Section 270(6) of the Financial Institutions and Markets Act, 2021 (FIMA) obliges a retirement fund to transfer a member’s benefit to another fund within 60 days of receiving the member’s written request, unless NAMFISA has approved a longer period. The question is whether a fund becomes liable for late-payment interest when a transfer is not completed within 60 days due to circumstances beyond its control — such as outstanding tax directives, incomplete member documentation, or third-party delays.
Legal Analysis
Section 270(6) creates a clear statutory obligation but is silent on whether liability for late payment interest arises automatically where the delay is not attributable to the fund. Read together with the law of obligations, liability should depend on whether the fund is in mora debitoris — defined as a culpable failure by a debtor to perform timeously.
Established authority recognises an excusatio a mora (lawful excuse for delay) where circumstances beyond the debtor’s control prevent timely performance. In Legogote Development Co v Delta Trust & Finance Co, the court confirmed that the defence of impossibility of performance is always available to a debtor. Likewise, the Appellate Division in Victoria Falls and Transvaal Power Co v Consolidated Langlaagte Mines described mora as a “wrongful default” — a standard a fund cannot meet where the delay was neither caused nor preventable by it.
Counterargument and Risk
Section 270(6) expressly provides a mechanism for NAMFISA to approve a longer period. A fund that becomes aware it may miss the deadline should therefore apply for an extension rather than rely on common-law defences after the fact. Failure to use this mechanism may be construed as an assumption of the risk of non-compliance.
The SCA’s decision in Scoin Trading v Bernstein reflects a stricter general approach to mora interest, though that case did not concern FIMA or retirement fund transfers. FIMA does not expressly impose strict liability, exclude fault, or bar recognised common-law defences — but the availability of the extension mechanism introduces legal uncertainty in any dispute over late payment interest.
Recommended Position
A fund should not automatically incur liability for late payment interest merely because the 60-day period has elapsed. Where a delay results from circumstances beyond the fund’s control and the fund has acted reasonably and in good faith, there are credible grounds to argue that it is not in mora. Funds should nevertheless:
Section 270(6) of the Financial Institutions and Markets Act, 2021 (FIMA) obliges a retirement fund to transfer a member’s benefit to another fund within 60 days of receiving the member’s written request, unless NAMFISA has approved a longer period. The question is whether a fund becomes liable for late-payment interest when a transfer is not completed within 60 days due to circumstances beyond its control — such as outstanding tax directives, incomplete member documentation, or third-party delays.
Legal Analysis
Section 270(6) creates a clear statutory obligation but is silent on whether liability for late payment interest arises automatically where the delay is not attributable to the fund. Read together with the law of obligations, liability should depend on whether the fund is in mora debitoris — defined as a culpable failure by a debtor to perform timeously.
Established authority recognises an excusatio a mora (lawful excuse for delay) where circumstances beyond the debtor’s control prevent timely performance. In Legogote Development Co v Delta Trust & Finance Co, the court confirmed that the defence of impossibility of performance is always available to a debtor. Likewise, the Appellate Division in Victoria Falls and Transvaal Power Co v Consolidated Langlaagte Mines described mora as a “wrongful default” — a standard a fund cannot meet where the delay was neither caused nor preventable by it.
Counterargument and Risk
Section 270(6) expressly provides a mechanism for NAMFISA to approve a longer period. A fund that becomes aware it may miss the deadline should therefore apply for an extension rather than rely on common-law defences after the fact. Failure to use this mechanism may be construed as an assumption of the risk of non-compliance.
The SCA’s decision in Scoin Trading v Bernstein reflects a stricter general approach to mora interest, though that case did not concern FIMA or retirement fund transfers. FIMA does not expressly impose strict liability, exclude fault, or bar recognised common-law defences — but the availability of the extension mechanism introduces legal uncertainty in any dispute over late payment interest.
Recommended Position
A fund should not automatically incur liability for late payment interest merely because the 60-day period has elapsed. Where a delay results from circumstances beyond the fund’s control and the fund has acted reasonably and in good faith, there are credible grounds to argue that it is not in mora. Funds should nevertheless:
- Endeavour to complete all transfers within the 60 days;
- Maintain detailed records explaining the cause of any delay;
- Demonstrate the steps taken to expedite the transfer; and
- Apply to NAMFISA for an extension where it becomes apparent the deadline may not be met.
Conclusion
Section 270(6) should be interpreted in conjunction with established obligations law. Where a fund is willing and ready to perform but is prevented by circumstances outside its control, there are credible legal grounds to resist liability for late-payment interest. This view is supported by the excusatio a mora doctrine and the case law cited above.
However, because FIMA provides an extension mechanism and no Namibian court has yet considered the issue under section 270(6), the matter is not entirely free from doubt. This represents RFS’s preferred interpretation; participating funds remain free to obtain independent legal advice and to adopt a different approach based on their own risk appetite.
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Section 270(6) should be interpreted in conjunction with established obligations law. Where a fund is willing and ready to perform but is prevented by circumstances outside its control, there are credible legal grounds to resist liability for late-payment interest. This view is supported by the excusatio a mora doctrine and the case law cited above.
However, because FIMA provides an extension mechanism and no Namibian court has yet considered the issue under section 270(6), the matter is not entirely free from doubt. This represents RFS’s preferred interpretation; participating funds remain free to obtain independent legal advice and to adopt a different approach based on their own risk appetite.
Read the full article here