With regard to absence on maternity leave, fund rules usually state something to the extent that a MEMBER is permitted to be absent on maternity leave as envisaged in the Labour Act, 2007, with either decreased or no remuneration, and that membership of the fund and the benefits and contributions payable shall not be affected by such absence from service.

The employer and the member are thus contractually obliged to continue full contributions to the fund and all benefits shall remain in place. Employer's employment practice is often inconsistent with the rules of the fund. One of two routes needs to be taken. Either the rules must be amended to reflect the conditions of employment or the conditions of employment must be changed to reflect the content of the rules relevant to maternity leave.

The employer needs to be clear whether or not the employee's retirement fund benefits, including the employer contribution towards retirement, should remain unchanged while she is on maternity leave or whether they are to be reduced in line with the reduction in the salary paid by the employer and this should be reflected clearly in the conditions of employment, as well as in the rules of the fund.

From a fund administration point of view, both member and employer contributions can usually be suspended fully; alternatively, only contributions towards retirement by member and employer can be suspended.

We have come across below conditions of employment that appear to adequately cover this situation.

"1. Remuneration

In return for the contributions of the EMPLOYEE as set out in clause 9, the parties agree on the following remuneration structure, based on a cost to company of N$ X:

1.1 The basic wage, as contemplated by the Labour Act, shall initially amount to N$ Y per month as from 1 September 20__. At the instance of the EMPLOYEE, and subject to the agreement of the EMPLOYER, this amount may comprise of such components as agreed between the parties. All allowances as agreed between the parties remain part of the basic wage of the employee. Where payable in cash or otherwise, the basic wage shall be paid or provided otherwise, monthly before or on the last working day of every month, unless specifically stated otherwise. The granting or otherwise of future increases shall be based on the EMPLOYEE'S individual performance, as well as on the overall financial performance of the EMPLOYER'S business during the preceding financial year. Salary reviews usually take place once a year, effective 1 October.

1.2 Participation of the EMPLOYEE in the EMPLOYER'S retirement fund, based on a pensionable amount of N$ Z per month, contributions totalling N$ Z * x% to be borne by the EMPLOYER y% shall be deemed to the EMPLOYEE contribution. Of this amount a fraction of x% minus y% shall be deemed to be the EMPLOYER contribution for the purpose of maternity leave benefits as contemplated by the Labour Act. The balance shall be deemed to be the EMPLOYEE contribution for the purpose of overtime pay and leave pay as contemplated by the Labour Act. This amount shall be adjusted pro-rata in accordance with any future increase granted by the EMPLOYER as aforesaid.

2. Maternity leave

The maternity leave entitlement of a female EMPLOYEE who has completed at least 6 (six) months of continuous employment with the EMPLOYER, subject to the provisions of the Labour Act, shall be:

2.1 Before her expected date of confinement -

She is entitled to commence maternity leave four weeks before her expected date of confinement, as certified by her medical practitioner.

And

She is entitled to maternity leave for the entire time from the commencement of her maternity leave as contemplated in the paragraph above, until her actual date of confinement;

2.2 After her date of confinement, she is entitled to -

Eight weeks maternity leave in every case;

And

In the case of an employee whose date of confinement occurred less than four weeks after the commencement of her maternity leave, the amount of additional time required to bring her total maternity leave to 12 weeks.

During maternity leave, the EMPLOYER shall pay a maternity benefit to the EMPLOYEE, calculated as 40% of the basic wage of the EMPLOYEE, up to a maximum amount equal to the difference between the basic wage earned by the EMPLOYEE immediately before the start of maternity leave, and the benefit cap set by the Social Security Commission from time to time for determining maternity benefits.

In addition, the EMPLOYER shall carry the deemed EMPLOYER contribution towards the retirement fund, medical aid scheme and any other benefit arrangement the EMPLOYEE participated in prior to the commencement of her maternity leave, and shall pay to the EMPLOYEE the total cost so calculated, minus so much as is agreed between the EMPLOYER  and the EMPLOYEE, to be paid by the EMPLOYER towards the retirement fund, medical aid scheme and any other benefit arrangement referred to, in respect of the EMPLOYEE during this period. The EMPLOYER shall also pay to the EMPLOYEE any maternity benefit received from the Social Security Commission in respect of the EMPLOYEE.

During the absence on maternity leave the EMPLOYEE shall remain a member of the retirement fund, medical aid scheme and any other benefit arrangement she participated in prior to the commencement of her maternity leave. The EMPLOYEE and the EMPLOYER shall assume responsibility for their respective deemed contribution, as contemplated in 1.2 during such absence, provided that the EMPLOYEE may request that all contributions to the retirement fund, for the purpose of funding the EMPLOYEE'S retirement, be suspended for such period. It is a further proviso, that any additional obligations the EMPLOYER may be required to comply with in terms of the Labour Act shall also be observed by the EMPLOYER."

Important notice and disclaimer
This article summarises the understanding, observation and notes of the author and lays no claim on accuracy, correctness or completeness. Retirement Fund Solutions Namibia (Pty) Ltd does not accept any liability for the content of this contribution and no decision should be taken on the basis of the information contained herein before having confirmed the detail with the relevant party. Any views expressed herein are those of the author and not necessarily those of Retirement Fund Solutions.