The Fiji National Provident Fund (FNPF) is set to introduce significant changes to its penalty system for delayed contribution payments starting from January 1, 2025. This initiative, approved by Parliament in July 2024, aims to make the penalty structure more equitable and manageable for employers.
Under the new system, the previous flat-rate penalty of $100 per employee will give way to a more flexible approach, where a 10 percent monthly penalty will be assessed on any outstanding contributions. This calculation will be based on the total of unpaid contributions and will accrue each month until the debt is resolved, including contributions due for December 2024.
FNPF Chief Executive Viliame Vodonaivalu emphasized that the adjustments are aimed at making the system more responsive to the evolving business environment, particularly for micro, small, and medium enterprises. He noted that while the existing penalty regime was functional, the new model would ensure greater accountability from larger organizations while alleviating financial pressure from smaller ones. Furthermore, all penalties collected will now go directly into the affected members’ accounts, enhancing their retirement savings.
Additionally, there will be a requirement for all Contribution Schedules (CS) to be submitted by the 14th of each month, effective from the same January 2025 date, giving employers additional time to manage their invoicing and payment processes.
To encourage employers to settle any existing debts before the new penalties are enforced, FNPF is offering a Penalty Waiver Amnesty until December 31, 2024. Employers who clear their outstanding contributions along with any applicable Loss of Interest (LOI) will have their penalties waived. Those who do not take advantage of this amnesty will face both the current and the new penalties. The current penalty will apply to contributions for November 2024, while the new 10 percent penalty will begin for December.
In summary, the changes are designed to foster a more conducive environment for employers while directly benefiting employees’ retirement savings. This encouragement for compliance through a waiver amnesty presents an opportunity for businesses to alleviate their past burdens and enter the new year with a fresh start.
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