FNPF to credit $239M to members accounts

The Fiji National Provident Fund will credit approximately $239 million to members accounts tonight following the Board’s decision to declare a 6.25% interest for the financial year ending 30th June, 2016.

Last year, FNPF declared a 6% interest totaling a pay‑out of $226 million.

Chief Operating Officer Jaoji Koroi says the interest declared is a testament of the positive flow‑on effect of the FNPF Reforms and commitment by the Board to continue to grow members’ funds.

Some of these changes included the separation of the pension business from current members’ contribution, the adoption of a sound pension rate, the requirements to meet solvency and the allocation of assets to ensure that the FNPF remains sustainable.

Koroi says a key investment strategy has been to pursue investment that grow and maximise returns on members’ funds. 

Some of these include the acquisition of shares in Vodafone Fiji Limited, the Fiji Ports Corporation Limited and Vision Group Limited.

FNPF says the latest International Monetary Fund report on the review of the FNPF Reforms have reaffirmed the success of the reforms in terms of the separation of accounts, restructure of the pension business and the streamlining of withdrawal facilities.

The major conclusions are that the reform process has been beneficial in making the operations of FNPF easier to understand and manage from both a financial and operational perspective.

Koroi highlighted the Cyclone Winston Assistance as being the biggest withdrawal assistance provided to its members since the Fund was established in 1966.

181,000 applications from 160,000 members were approved for the Winston natural disaster assistance with a total payout of $275 million.

He clarifies that the Return On Investment has not been affected by the Winston withdrawals this year, although members’ balances have reduced by $275 million.

Members who withdrew their funds under Cyclone Winston natural disaster assistance lost out on partial interest which would, otherwise be credited this evening.

This is the second year that the Fund will apply the new interest crediting formula that ensures that partial interest is credited on contributions received less withdrawals for the period, as well as for the full year on the opening balance.