Wednesday, December 1, 2010

FNPF Payments Raises Real Concerns for Members

Sai's Comments
  • A number of disturbing observations can be made in relation to changes in the nature of the FNPF payments reported below as a direct result of the political and economic climate currently prevailing in Fiji and includes the following:
    • imposition of the 55 year retirement age has resulted in increase in lump sum withdrawals out of necessity not choice;
    • reduction in payments to members' beneficiaries as people have to take care of themselves first- i.e. difficult to look after others;
    • very punitive reduction on partial withdrawals has halved the amount paid out meaning over $70million less available to meet the needs of members, especially during natural disasters and unforeseen costs. After all the fund belongs to members not FNPF;
    • reduction in housing withdrawals as members have to prioritise to meet daily expenses - i.e. you can't eat your house even though it could provide a good equity base for economic development. Again a direct result of the unfair restrictions placed on the fund to suit the illegal regime's borrowing requirements; and
    • given all the above, one would have expected a much larger increase in medical withdrawal than that posted, given the resulting trauma and ongoing stress. Again out of necessity, members are probably going without or with minimal medical care in place of other pressing living expenses. Another coping mechanism which will only defer needed care and treatment to the future when its severity and cost will be much more unbearable.
  • As there is no report of deposits, there is no way of determining the true picture of the fund. Nevertheless, it must be concerning to learn that FNPF appears to be on a shopping frenzy in its search to grow the fund through investing in some dubious projects.
  • In nations run by dictators, except for Chile during Pinochet days, it is often the trend to lock away such funds in local and capital intensive projects, making it difficult for withdrawal by members.
  • But in the case of Fiji, we all know it is the Government, not members, who currently have the first call on the fund to salvage its dire financial position. Faced with this, it will require ongoing liquidity transfers from the fund for a long time to come at the expense of members.
FNPF Pays out $86m 
by Timoci Vula

Fiji Times - December 01, 2010

THE Fiji National Provident Fund approved 4767 applications from members above 55-years old this year for lump sum withdrawals totalling $86.86million.

In 2009, the FNPF approved lump sum withdrawals valued at $75.43m.

The fund's annual report released last week stated that those 55-years and above could opt to withdraw all their savings as lump sum payment, full pension or part lump and part pension.

The report also revealed that during this year, $24.69m was withdrawn by 1688 Fiji citizens migrating to other countries and $5.61m by 248 non-Fiji citizens.

The fund paid out $11.57m compared to $12.54m the previous year to members' beneficiaries.

"Of the 1581 applications, 1029 were paid to nominees, 320 to the High Court and 232 to FPTCL (Fiji Public Trustee Corporation Ltd)," fund chief executive Aisake Taito said in the report.

"In 2010, the fund paid $8.74million as special benefit, and $6.25million paid in 2009," he said.

Mr Taito said for partial withdrawals, $61.74m was paid out this period compared to $135.66m in 2009.

"The decrease is attributed to the tightening of withdrawal policy and that no natural disaster assistance was offered to members," he said.

Under housing withdrawals for this year, he said housing transfers totalled $29.13m, a decrease of 4.6 per cent from 2009, which totalled $30.55m.

Mr Taito also revealed that the total paid out for medical withdrawals was $2.38m compared to $2.35m in 2009.

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