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The pension rate paid out by the Fiji National Provident Fund may be reduced from the current 15 percent per annum as part of a review, says Prime Minister Commodore Voreqe Bainimarama.
Speaking at last night’s launch of the pension fund’s new corporate image, Bainimarama urged the FNPF board to carry out the review.
“I acknowledge that the pension rate offered by the FNPF is one of the most generous by world standards and the World Bank has already emphasised the need for a review.”
“I note with interest the generous amount paid out to pensioners by the Fund prior to 1999. Some pensioners received three to four times more than their contribution and interest earned. To ensure that the pension fund is equitable, fair and sustainable for our current and future contributors, it is critical that management take the necessary steps now to review and reform the pension scheme,” he added.
Statistics from FNPF’s annual reports show a declining percentage in eligible members opting for a pension. At the end of FNPF’s 2007 financial year, only 15 percent of eligible members opted for a pension compared to 25 percent in 2006, 28 percent in 2005 and 37 percent in 2004.
FNPF’s latest financial report, which detailed financial results for the financial year ended June 2007, showed that it had 9140 active pensioners that year.
Bainimarama said he has urged the FNPF board and management to undertake the pension review exercise “so that the discrepancy in the pension rate is resolved and that consistency is ensured.”
FNPF currently pays out a 15 percent pension rate per annum and paid out a total annuity of $38.2 million in 2007, compared to $37.43 million in 2006, $22.74 million in 2005 and $21.30 million in 2004.
Its investment portfolio in 2007 totaled $3.14 billion, with over 90 percent of it held domestically.
