Newborns can now become members of the Fiji National Provident Fund under the Voluntary Membership Scheme following changes to the FNPF Act 2011.
FNPF says this change is effective from this month and removes the minimum age limit, which was previously set at six years old and now allows newborns to be registered as minor voluntary members.
Chief Executive Officer Viliame Vodonaivalu says this change is part of the Fund’s plans to encourage a culture of savings, particularly for children.
He says there is no doubt that for many of the members, their retirement savings is their only source of savings and while minor voluntary membership scheme was previously open to children 6 years and older, this change now enables parents to start the savings plans for their children from birth.
Vodonaivalu says it is basically another avenue for parents to plan for their children’s future, especially since their savings kept under their minor voluntary accounts, allows for payment of tertiary level studies as well as medical treatment.
He says savings with FNPF benefits from compound interest – apart from investment returns so the funds that are kept in any member’s account will keep growing even with small amounts being paid into it at regular intervals.
The CEO says savings for a child registered at birth for a minor voluntary membership scheme and with regular monthly contributions of $50, would grow to $16,711 when he or she turns 18 years old (assuming that the account starts with a zero balance and the credit interest rate is 5 percent throughout the 18 years).
He says the interest alone is about $6,000.
The minimum deposit required to open an account is $10 and the minimum monthly deposit is also $10.
FNPF adds all deposits above $5,000 will be reported to the Fiji Financial Intelligence Unit, as required under the Financial Transactions Reporting Act.
