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FNPF: Member Interest Not Affected By Big TC Winston Payout

The Fiji National Provident Fund credited approximately $239 million to members yesterday evening following the declaration of a 6.25 per cent interest for the financial year ending June 30, 2016.
01 Jul 2016 09:51
FNPF: Member Interest Not Affected By Big TC Winston Payout
FNPF

The Fiji National Provident Fund credited approximately $239 million to members yesterday evening following the declaration of a 6.25 per cent interest for the financial year ending June 30, 2016.

This is the highest interest rate paid by the fund since 2006.

The fund has emphasised the Return on Investment (ROI) was not affected by the TC Winston relief assistance withdrawals which had totalled $275 million payout.

However, members who withdrew their funds under TC Winston natural disaster assistance lost out on partial interest which would, otherwise be credited on June 30.

The past year, FNPF declared a six per cent interest totalling a payout of $226 million.

In determining the interest for this financial year, the Board considered returning to members something close to the net Return on Investment earned on their funds.

Some surplus has been retained to finance future requirements for solvency.

The rate has also been certified by the Fund’s Actuary, as required under international best practices and in compliance with FNPF Regulations 41(4).

This is the second year the Fund applied the new interest crediting formula that ensures that partial interest is credited on contributions received less withdrawals for the period, as well as for the full year on the opening balance.

Chief operating officer, Jaoji Koroi, said it is therefore important for members to understand that the 6.25 per cent interest credited depend entirely on the balance of their account.

“Plus taking into considerations movements during the financial year 2016.”

Mr Koroi also confirmed that the Board has also retained the Special Death Benefit (SDB) of $8500 for FY2017 at a premium of $35, to be deducted from members’ accounts on July 1, 2016.

 

Positive reforms

Meanwhile, Mr Koroi said the interest declared was a testament of the positive flow-on effect of the FNPF Reforms and commitment by the Board to continue to grow members’ funds.

“This would be the fourth year since we embarked on the FNPF Reforms that have now placed the Fund in a sustainable footing,” he said.

“Some of these changes included the separation of the pension business from current members’ contribution, the adoption of an actuarially sound pension rate, the requirements to meet solvency and the allocation of assets to ensure the Fund remains sustainable.

“Since then, the Fund has continued to reshape and strengthen our investments and operational strategies to grow our members’ savings and improve the returns to members.

“This is through Investment Rehabilitation, enhance operational efficiencies and improve the quality of our services through the IT Reforms.”

Mr Koroi said a key investment strategy has been to pursue investment that grow and maximise returns on members’ funds.

Some of these included the acquisition of shares in Vodafone Fiji Limited, the Fiji Ports Corporation Limited and Vision Investments Limited.

“The rehabilitation programme for impaired assets continued, with major projects progressing well,” Mr Koroi said.

 

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