About 1,000 employers have closed shop since March this year and more than 50,000 Fiji National Provident Fund members are unemployed, with a further 25,000 workers on extended leave.
This is according to FNPF’s 2020 Annual Report.
FNPF CEO, Jaoji Koroi says the impact on the informal labour force has also been alarming.
He says while the numbers appear to stabilise, the full effects of COVID-19 is yet to be realised.
He says it is clear that workers in the tourism-related sectors are the most affected and most of these workers have no means of income protection.
Koroi says the Fund expects an average monthly contribution of about $23 million until the contribution rate of 18% is reinstated. He says this is a reduction of more than 40% when compared to pre-pandemic monthly collections.
For withdrawals, the FNPF paid out $438.9 million, an increase of 23% driven by retirement, migration, and unemployment withdrawals that included COVID-19 related assistance totalling 101,879 applications valued at $55.8 million.
Koroi adds the Fund’s cash flow declined from $889.2 million to $693.9 million, a reduction of 23.3%.
He says the current projected cash flow position is well above the buffer limits and management is confident they will continue to manage the situation.
Koroi also confirms the Fund expects a negative net contribution next year as a result of reduced contributions and high withdrawals.
The Fund’s net contribution has remained positive at $152.5 million compared to $296.2 million last year.
He says the Fund actively manages its liquidity levels and funding to support their strategies and meet regulatory requirements and to do this, they monitor their position using a number of risk appetite measures.
Koroi says 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.
Koroi further says should there be additional stress on their clash 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.
