High and dry

REPORT: 60,000 FNPF MEMBERS HAVE NO MONEY

THE Fiji National Provident Fund (FNPF) says 60,000 members have no money in their accounts.

According to the FNPF’s 2020 annual report that was tabled in Parliament recently, 17,000 members have zero dollars in their general account.

Outgoing FNPF chief executive officer Jaoji Koroi is also quoted in the report, saying the fund will review its withdrawal policy.

He said government policy to reduce contribution rates from 18 per cent to 10 per cent effective April 1, 2020, to December 31, 2021, to assist employers meet their operational expenses resulted in a 9.3 per cent decline in contributions from $651.9 million in 2019 to $591.4m this year.

He said FNPF’s cash flow declined from $889.2m to $693.9m — a reduction of 23.3 per cent.

Mr Koroi said FNPF would sell offshore equities if there was any stress on cash flow.

ABOUT 60,000 Fiji National Provident Fund (FNPF) members have nil balances, says the 2020 FNPF annual report tabled in Parliament recently.

The FNPF reported that 17,000 members have no money in their general account.

Breaking down these figures into age categories, the fund said 7505 members between the ages of 50 and 54 years had nil balances while 7131 between the ages of 45 and 49 years do not have any money in FNPF.

The report said 11,190 members between the ages of 35-44 years have nil balance while 7185 members between 25 and 34 years have no money in their FNPF accounts. For those between the ages of 16 and 24, 2285 have zero-dollar balance.

The report quoted outgoing CEO Jaoji Koroi as saying FNPF would review its withdrawal policy to assist members to build their balances.

“Low member balance is an ongoing concern,” he said in the report.

“This has been exacerbated by the COVID-19 withdrawals with more than 17,000 members now left with zero balances in their general account. Although the preservation policy has secured 70 per cent of their savings in their preserved account, these members will still need to build their balance for a meaningful retirement.

“To assist members build their balance, the fund will review the withdrawal policies to provide value-added services, encourage members to repay early withdrawals, and continue with our campaign for more members to sign up for additional contributions.”

Mr Koroi said “key to addressing these concerns” would be FNPF’s collaboration with Government and other relevant stakeholders.

“These changes will include structural changes in the scheme design. We will also continue to advocate on the protection and conservation of the preserved account.

“The steadfastness of protecting 70 per cent of members’ savings for retirement has led to the doubling of this account from $2.5 billion in 2014 to $5.0 billion in 2020.”