Fiji National Provident Fund’s 2015 Annual Report makes interesting reading and is inspiring to say the least.

FNFP continues its strong performance maintaining a consistent upward growth.

It reflects the exemplary leadership of Ajith Kodagoda as board chairman. The positive results, he says, “vindicates our focus to reshape and strengthen our investment and operational strategies to continue to grow our members’ savings and improve the quality of our services.” He has every reason to be pleased with another exceptional year of performance.

It’s great news for the members. The key performance indicators show that the fund, with investment assets totalling $4.1billion, returned 6.6 per cent, after expenses and compliance with solvency requirements.

In June this year, the fund declared a six per cent interest paid to 403,316 members. This equated to  $213.2million being credited to their accounts on June 30. The rate was derived under a new formula that ensures partial interest is credited on contributions received less withdrawals for the period, as well as for a full year on the opening balance. The new formula is in line with international best practices.

The six per cent is an increase from 5.75 per cent last year and 5.50 per cent in 2013.

The total membership is also an increase from 395,246 last year and 381,303 in 2013. The steady rise mirrors the the number of people in paid employment.

The members’  fund has risen from $3.7bn last year to  $4bn this year.

$123.1m were paid out to those 55 years and over who withdrew their funds. This figure jumps from $115m last year.

For housing transfers, $59.5m was withdrawn compared to $48.7m last year.

The KPIs proved that it was another remarkable year “despite some challenges in the operating environment.” According to the annual report interests rates were generally low during the period, notwithstanding some upward swings in certain tenures. Domestic liquidity closed at $689m compared with $531m last year, while FNPF cash holding stood at $656.2m compared with $645.5m. The high cash holdings were held to fund some investment opportunities including privatisation that had not materialised by the end of the year. The annual report said against this backdrop, FNPF continued to pursue its key investment objective of diversification into growth assets and offshore investments.

While some success was achieved, the fund’s investment portfolio is still well below the optimal target of 60 per cent growth assets and 25 per cent offshore.

The report says given limited investment opportunities and the restrictions imposed by the Reserve Bank of Fiji, achieving this target will take time. FNPF says, however, “this will remain our focus and we will continue to work collaboratively with the relevant authorities to achieve this strategic objective.”

Since the reform programme was launched in 2010 the FNPF has recorded significant progress. The board of directors, management and staff must be commended for a job well done.  They have worked hard despite the initial challenges. Congratulations!

Feedback:  nemani.delaibatiki@fijisun.com.fj