Fund clarifies cash flow position
THE Fiji National Provident Fund (FNPF) will sell its offshore equities should there be any additional stress on its cash flow position, outgoing chief executive officer Jaoji Koroi said.
Mr Koroi made the statement in the FNPF 2020 annual report tabled in Parliament recently.
He said Government reduced the contribution rates from 18 per cent to 10 per cent effective from April 1, 2020 to December 31, 2021, to assist employers meet their operational expenses.
“The reduction in rate resulted in a 9.3 per cent decline in contributions from $651.9 million in 2019 to $591.4 million,” he said.
“The fund’s cash flow declined from $889.2 million to $693.9 million, a reduction of 23.3 per cent.”
Mr Koroi said the current and projected cash flow position was well above the buffer limit and “management is confident that we will continue to manage this situation”.
He said the FNPF actively managed its liquidity levels and funding.
“To do this, we monitor our position using a number of risk appetite measures such as the liquidity buffer, set out in the treasury policy.
“This buffer safeguards against mass withdrawals or unforeseen circumstances and accordingly provides investment assets that are liquid or can be converted to meet these needs. Should there be additional stress on our cash flow position, FNPF has offshore equities available, which can be sold and made available within five days and an agreed line of tradeable facility with the Reserve Bank of Fiji.”