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Imprudent management of the country’s only public superannuation fund can trigger a worsening of Fiji’s poverty situation, a local economist said.
In an interview with FijiLive, University of the South Pacific lecturer Dr Sunil Kumar said it was important that the Fiji National Provident Fund, being the only form of savings that most workers have, be properly managed as its poor performance or even collapse can lead to widespread poverty.
This comes amid continuing public concern on the management of the pension fund’s massive $3 billion investment portfolio, equivalent to half the country’s GDP.
“I think the concerns that have been raised are legitimate ones and because FNPF is a superannuation fund, people who are coming out of work, who are retiring, they need those funds,” said Kumar.
“I believe that the government and those in the drivers’ seat need to take some initiatives to act on the concerns that have been raised and take some initiatives to act on them and make sure that due diligence is observed in terms of the use of those funds,” he added.
If the FNPF did get into financial trouble, it would mean that those who are retiring may get less money or none at all, which would increase Fiji’s poverty population.
“The management of the FNPF has direct implications to Fiji’s poverty level, as the people who will come out of their jobs after retirement would have their livelihood affected drastically if the fund collapses,” Kumar said.
The FNPF recently announced a consolidation of its investment policy in a bid to cut costs and streamline its investment policies as it continues its struggle to sell off non-performing assets as well as spread its entire $3 billion portfolio in a narrow domestic market.
At the close of its 2007 financial year - in June 2007 - FNPF reported it had just over 340,000 members.
The Fund is yet to release its 2008 annual report.
