FNPF pension compensation

The manager TLTB Northern raised an interesting point when he said it was in the interest of farmers to return idle lands that were still being leased, if they were concerned with the supposedly high lease premiums.

Jese Buinimasi answered the question during a consultation between the farmers with the Minister of Sugar in Macuata last week. The lease premiums are based on the total area of the land being leased irrespective whether all or partial part of the lot is being farmed.

It seems that the farmers have ulterior motives in retaining those idle lands.

Maybe it is being used as security for bank loans. Maybe that is why the reluctance in releasing those lots as they know the financial benefits of those idle lands.

The iTaukei Land Trust Board should promote such person as Mr Buinimasi to even higher positions because he clearly articulated the issue at hand when answering the question on the supposedly high lease premiums.

Altogether now, five FijiFirst elected members have resigned from Parliament. What’s the problem? Salary isn’t enough?

Jan Nissar, NSW, Australia

I believe corruption has suddenly been eradicated completely since the election of the coalition Government.

It is amazing how quickly things can change when you shower the people with love, compassion, freedoms, including freedom from fear, not to mention all the exuberance and impartiality.

With the new-found civic pride there is no need for corruption any longer.

With so much independence and impartiality in Fiji combined with the eradication of corruption, those who have prior charges over their heads can now travel safely with the Prime Minister, without fear.

Those who have been incarcerated can now be released as all problems of the past have now been fixed.

The turn of events is simply amazing. And with there being no more fear amongst the people of Fiji, no one dared say anything. Everyone is just too busy enjoying their newfound love and freedom.

All those who were involved in any way in treason and were waiting in the wings can now be safely recycled and reinvented after 20 or more years.

Tomasi Boginiso, NSW, Australia

Surely, the ministers in the former FijiFirst Government had bodyguards who were entitled to carry guns.

But what were they afraid of that they needed this sort of protection?

An investigation and the people involved in the decision of weapons to be carried around in the presence of the public are to be brought to task.

Their performance as ministers was, in my opinion, appalling and a waste of taxpayer’s money in providing security for them.

Hopefully, this will never be repeated.

Following on to my letter on March 8, 2023, I am sure some readers – FNPF executives and some coalition Government officials – may dismiss pensioners’ compensation claim saying that it is water under the bridge, many pensioners have died, the huge sum involved, it may cause financial instability for the Fund and finally, Government may need to subsidise it.

Yes, it is a huge sum, which equates to huge impact on pensioners’ lives. The lives of pensioners have been upended and many are living in poverty, struggling to cope with the effects of COVID-19, inflation and they can no longer afford medical expenses in their old age.

It is a significant injustice not only to old pensioners, but also to the most affected and vulnerable – old women and young children. At that time, some powerful and heartless Board members, FijiFirst Government ministers and officials accused pensioners of being greedy.

Not so! We saved for a lifetime and strived to achieve FNPF’s recommendation to target a pension equivalent to 70 per cent of one’s net pay at the time of retirement.

Yes, there were some pensioners who deposited large lump sums prior to retirement, which the Fund happily and greedily accepted – FNPF could have remedied this without falsely blaming all loyal pensioners.

Both the ILO3 and FNPF’s consultants, Promontory1&2, have recommended that FNPF make provisions to honour contracted pensioners.

The FNPF agreement with pensioners is subject to contract law. FNPF’S consultant - ‘Promontory’ states ‘Any retrospective adjustment of existing pension benefits would be difficult under contract law’[1] ………… and ‘little support from stakeholders’ 1 to withdraw, cap or reset at a discount contracted pensions.

Both ILO and Promontory also recommended “setting aside sufficient funds to ensure that future payments at the contracted rates are met[2].”

Yet, the FijiFirst Government legislated to stop pensioners’ High Court case seeking redress and FNPF terminated contracted pensions. This is a private Pension Fund – the stakeholders are members, pensioners and employers.

Government is not a stakeholder and should not be involved!

It was an unjust act to deprive pensioners of their full contracted pensions. And then to convert the profit of more than $300 million for the benefit of FNPF and members instead of pensioners – appropriate indicative figures:

• FNPF liability due -

Refund to contracted pensioners by way of cash or annuities -

• Profit -

Fortunately, there are still several pensioners alive seeking justice, if the word “justice” has any meaning to our previous FijiFirst Government setting further bad example to our business community.

Now, to the important question: Can FNPF afford to compensate pensioners, and will it cause financial instability?

The good news is that Government will not be required to fund the compensation.

Secondly, compensation would not cause instability for FNPF.

Calculations below will indicate that FNPF can afforded to make compensation.

FNPF 2022 Annual Report balance • to contracted pensioners sheet page 56 shows:

• Net assets -

• Liability- Members benefits

80.1%

Net assets less liabilities 19.9% (Industry recommended •

Reserves –

10%)

• Less compensation to pensioners

• -

• Revised Reserve - 14.0% So, one can see that FNPF has $1.7 billion available to compensate pensioners’ $508m, leaving a revised reserve of $1.2b or 14 per cent of net asset.

It would still be well over industry recommended standard of 10 per cent and much better than 1.59 per cent as at June 2000 – a very healthy financial position.

So, let us be generous and kind; let us say that FNPF should repay the loan from contracted pensioners (used by the Fund for 9 years to help stabilise its balance sheet). Or would FNPF like to reinstate the pensions?

In 2014, I had handed the FNPF executive a spreadsheet showing that it would made a profit substantially more than the above mentioned $508m, if they continued to pay contracted pensioners till they all died at age 74 (life expectancy now down to approximately 71.4 years).

Basis of calculation:

FNPF consultant’s valuation of pension liabilities; less continued payment of contracted pensioners died; plus annual interest earned.

The authorities made a conscious decision cancelling pension contracts and refunding pensioners’ original contributions knowing it would result in an instant profit of over $300m and using it to support their weak financial position.

Let me explain why this profit belongs to pensioners. The FNPF restructured and separated MEMBERS business and PENSION business.

The amounts due to each business are valued by FNPF’s actuaries. The funds should normally be used to settle amounts due to each business.

Unfortunately, FNPF did not distribute all amounts owing to pensioners for their benefit. They only refunded their original payments, made a profit and converted that profit for the benefit of others – in this case – to strengthen their balance sheet and finally benefit members instead of pensioners.

With our new caring coalition Government, it is now time for accountability, restitution and reconciliation.

Pensioners, let your voices be heard so that FNPF, with the coalition Government’s blessing, make compensation to us.

God bless and guide our coalition Government. pensions cancelled contracted till all