The Coalition Government of Fiji has confirmed that it will not reinstate pensions from the Fiji National Provident Fund (FNPF) dating back to 2012, deeming such a move unconstitutional and financially unfeasible. This decision was made following a review by Cabinet, which evaluated input from the Ministry of Finance, the FNPF, and the Office of the Solicitor-General regarding the implications of reversing the pension cuts implemented under the FNPF Act of 2011.
The legal and financial assessments concluded that the pension payments had exceeded actual member savings, creating an unsustainable situation where younger and current members were effectively subsidizing higher payouts. Restoring pensions to their 2012 levels was projected to cost an estimated $582 million, which includes $372 million in back payments and $210 million in future obligations. The government indicated that such funding would threaten the financial stability of the FNPF and impact the savings of over 430,000 active members.
Cabinet’s decision was also supported by Section 173(3) of the 2013 Constitution of the Republic of Fiji, which restricts Parliament from altering the legal impact of the earlier reforms. Additionally, Section 26 ensures that members’ savings are deemed private property and cannot be utilized without consent.
Despite the denial of backdated pension reinstatement, the government has announced that pension rates will be restored for future payments. Starting August 1, 2024, affected pensioners will receive the reinstated amounts, which will be funded through taxpayer contributions at an estimated cost of around $57 million.
Finance Minister Esrom Immanuel emphasized the government’s commitment to maintaining the actuarial soundness and sustainability of pensions, asserting that this decision provides clarity and finality on the matter. He reiterated that the government has no plans to retroactively restore FNPF pensions to their pre-2012 status, aiming instead to ensure the ongoing protection of members’ savings.
This proactive approach gives hope for more stability in Fiji’s pension landscape, as the government works to balance financial responsibility with the welfare of its citizens.
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