A recent report from the Fiji National Provident Fund (FNPF) highlights a pressing financial issue among its members. Over 200,000 members, nearly half of the total membership, have savings of up to $5,000 in their accounts. This statistic raises alarm, particularly as more than 10,000 members aged between 50 and 54 years are approaching the retirement age of 55.
During a members’ forum held at the Grand Pacific Hotel in Suva, concerns were voiced regarding the low balances in their accounts. A member inquired about the existing strategies to aid those with lower savings in boosting their funds.
FNPF General Manager for Member Services, Alipate Waqairawai, addressed the situation, attributing these low balances to a legacy from the preservation policy that was in effect prior to the pension reform in 2014. He explained that this policy allowed members to withdraw up to two-thirds of their funds for various reasons, leading many to deplete their savings over the years.
As the fund approaches its 59th anniversary, Waqairawai pointed out the need for a shift in approach. The preservation policy has since been amended, now permitting members to withdraw only up to 30% of their funds while retaining 70% for retirement. This change aims to secure better financial futures for members as they age.
Waqairawai noted a noticeable change in member behavior; many are now hesitant to withdraw their funds, motivated by the accumulation of interest and the encouragement of additional voluntary contributions.
At the same forum, FNPF’s CEO Viliame Vodonaivalu shared positive financial results for 2024, with contributions reaching $779.8 million, marking an increase of $238 million from 2023. This uptick can be attributed to more members opting for additional and voluntary contributions.
In summary, while the current situation regarding low member balances requires attention, the recent reforms and increased contributions signal a positive shift towards more secure financial futures for FNPF members. The feedback and involvement of members in shaping the Fund’s policies will be essential as it continues to adapt and evolve.
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