FNPF has taken the first step in addressing the issue where 75% of the members of the Fund have a balance of below $10,000 in their accounts.
FNPF’S Chief Operating Officer Jaoji Koroi says they have established two accounts for members and focused on the preservation of 70% of their savings and contributions for retirement.
Koroi says 30% is for the members pre‑retirement withdrawals.
He says in addition, members are now able to save additional contributions of up to 12% of their salary on a voluntary basis, apart from the 18% mandatory contribution.
FNPF says to support it’s goals to ensure FNPF members have adequate savings for retirement, the Fund will pursue a more active role in financial literacy and provisions for retirement planning tools.
They had earlier stated that 4% of the FNPF members have a balance of above $50,000 in their accounts.
Koroi says 27% of these people are above the age of 45 years and this means that there is very little they can do to ensure that they retire with an adequate balance.
Koroi says in the past, members could access up to two thirds of their balance while they were still working and that has now been changed.
He says the benefit of this will be seen in 10 to 15 years.
Koroi has also highlighted that there is a very low pension take up rate.
He says in 2015, only 4.23% of the FNPF members that reached the retirement age took the pension option.
FNPF has more than 403,000 members.
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