The Fiji National Provident Fund (FNPF) will introduce significant modifications to its penalty system for late contribution payments starting January 1, 2025. These alterations, approved by Parliament in July 2024, aim to allocate penalties directly to the accounts of affected members.
The existing penalty structure of $100 per employee per month has been in place since November 2011. Under the new rules, a monthly penalty of 10 percent will apply to any outstanding contributions, effective from the beginning of 2025, covering even the contributions for December 2024. This penalty will be calculated on the unpaid contribution balance and will continue to accrue until the debt is fully settled.
FNPF Chief Executive Viliame Vodonaivalu emphasized that this updated penalty system offers a fairer and more equitable approach, particularly as the business landscape evolves. He noted that while the old system served its purpose, the new plan would be more manageable, especially for smaller enterprises, while still holding larger businesses accountable.
In a further effort to enhance retirement savings for members, all collected penalties will now go directly into their accounts. Additionally, to ease the transition for employers, all Contribution Schedules must be submitted by the 14th of each month starting January 1, 2025. This adjustment allows employers extra time to process payments before the end-of-month deadline.
To support employers in clearing out outstanding debts before these penalties are implemented, a Penalty Waiver Amnesty will be available until December 31, 2024. During this amnesty period, employers who pay their overdue contributions and applicable Loss of Interest (LOI) will have their penalties waived. Vodonaivalu encouraged all employers to take advantage of this opportunity, as those who do not will face both the existing and the new penalty structures.
Overall, these changes reflect a proactive approach aimed at ensuring the sustainability of retirement savings while alleviating some pressure on businesses, especially smaller ones. By transitioning to a more flexible penalty system, the FNPF is taking significant steps to prioritize the financial well-being of its members while fostering a supportive environment for employers.
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