If the pension arrangement was not reviewed the Fiji National Provident Fund would have started making losses.
FNPF CEO, Aisake Taito explains that current FNPF Assets is $3.7 billion, members balance $2.9 billion in addition to that they have special death benefit of about 18 million dollars, by subtracting other costs, the Fund will have a surplus of $110 million.
However, if the current arrangement continues with no change, the difference is the pension liabilities, which gave them a deficit of $112 million.
From 1st March next year the pension rate will be reduced to 8.7%.
According FNPF CEO Taito current pensioners will get their original pension amount back and they can choose from a number of options available as well as contributing more to their pension.
Taito also confirms that under the new decree, members will still have option to withdraw lump sum from FNPF after they retire at 55.
The Fiji National Provident Fund has reinforced the Prime Minister’s words that there was a serious need to review the pension scheme, as in its current form FNPF would not be able to support Fiji’s current and future pensioners.
FNPF CEO Aisake Taito said they have consulted actuarial and legal experts, as well as the public to design a pension scheme that will empower pensioners and provide members with the pension they deserve in retirement.
Meanwhile, the 2,500 pensioners who currently receive a monthly pension of below $100 will be brought up to receive a $100 a month under the new rates.
Taito said some pensioners receive as low as $5 per month.
He added 4,700 pensioners whose income is between $100 to $300 per month will have their pension income protected and continue to receive the same amount as they do currently.
The remaining 4,265 pensioners, who receive over $300 per month will be offered the most favorable according to their circumstances of two options, top up their new pension level to $300 per month or take 25% of their total refund, capped at $10,000.
According to FNPF CEO current pensioners will get their original pension amount back and they can choose from a number of options available as well as contributing more to their pension.
Taito also confirmed that under the new decree members will still have option to withdraw lump sum from FNPF after they retire at 55.
The new FNPF decree will come into effect on 1st March 2012.
Story by: Ronal Deo
Feature
New scheme designed to empower pensioners
