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New Fiji National Provident Fund Plan

Fiji National Provident Fund will soon allow children as young as six years old to be members. General Manager Member Services Alipate Waqairawai confirmed this during the submission of the
29 Mar 2018 10:12
New Fiji National Provident Fund Plan
From left: Fiji National Provident Fund chief executive officer Jaoji Koroi and general manager for member services Alipate Waqairawai during the submission on March 28, 2018. Photo: Parliament of Fiji

Fiji National Provident Fund will soon allow children as young as six years old to be members.

General Manager Member Services Alipate Waqairawai confirmed this during the submission of the FNPF 2017 Annual Report to the Parliamentary Standing Committee on Social Affairs yesterday.

Mr Waqairawai said this was also an effort on their part to teach members from a very young age to save for their future.

“The best time to prepare is when they are young,” he said.

Parents and guardians will be encouraged to contribute to the fund and kick-start savings for their children and children under their guardianship from a younger age.

FNPF has consistently given high interest rates to its members over the past few years, following the reforms introduced by Government.

People between the ages of 15 and 55 can be a member of the fund.

Chief executive officer Jaoji Koroi said this was part of their new initiative, which is currently in the legislation.

Mr Koroi said the fund needed to improve its systems in terms of operation and legal requirements.

“When a six-year-old comes on board, he/she will need to be assigned to somebody. These are the legal requirements,” Mr Koroi said.

“They are still minors, so they can’t make decisions for themselves. Someone needs to be appointed to look after their interests.”

Commenting on this, Assistant Minister for Health and Medical Services Veena Bhatnagar said she welcomed the thought of engaging or rather getting contributions from the children as young as six years old.

“Most parents now days are very much investing in their children’s future, so this is a good opportunity for them to do so,” she said.

FNPF is expected to launch this initiative towards the end of this year when their legal requirements and operation system were ready, Mr Koroi said.

FNPF is also collaborating with the Ministry of Education where Year 10 secondary school commerce students do a project on the FNPF in order to inculcate to the next generation that they must plan and save for their retirement.

There are discussions to involve primary school students as well.

It was also revealed that 73 per cent of members have less than $10,000 in their retirement funds right now.

With the change in legislation, the fund intends to counter that as well to ensure the members are in a healthy financial position when they retire.

Over the past few years, FNPF has given out as much as 6.3 per cent in interest to their members and aims to maintain that for the next three years.

Some key achievements of the fund:

Net profit increased to $359 million from $331 million in 2016 attributable to better investment returns.  From this profit, $270 million was credited to the members’ accounts in 2017 equivalent to 6.35 per cent in interest paid. The fund has credited over $1 billion to its members in the last five years.

Record contributions of $546 million from $480 million in 2016 is the result of better compliance through automation.  Total assets of the fund now stands at $5.7 billion, which is more than sufficient to cover its liabilities of $4.8 billion.

Net assets is now $836 million.  After applying the solvency requirement of 10 per cent, there is still surplus of $276 million.  This is a major achievement and improvement from the negative $337 million in 2010 prior to the reforms. In 2010, prior to that, it was $337 million in the negative.

Edited by George Kulamaiwasa

Feedback: selita.bolanavanua@fijisun.com.fj

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