Members of the Fiji National Provident Fund (FNPF) choosing a life pension upon reaching 55 years of age will not receive any Cost-of-Living-Adjustments (COLA) on their pension rates, even if the fund experiences improved financial performance or investment growth. This clarification came during the FNPF Members Forum held in Suva, where discussions centered on the fund’s financial results for the 2025 financial year, which concluded on June 30, 2025.
In a Q&A session, FNPF member Nimesh Raniga inquired about the possibility of pension rates being adjusted in line with the fund’s performance, questioning why fixed rates do not incorporate an annual COLA adjustment. In response, FNPF General Manager of Business Development & Strategy, Millie Low, explained that pension rates, determined by actuaries, remain unchanged throughout the pensioner’s lifetime. Currently, the rates stand at 8.7% for single life pensions and 7.5% for joint life pensions.
Ms. Low reiterated that COLA or inflationary adjustments are not made to pension conversion rates, emphasizing that the rates are actuarially tested at the point of opting for the pension and will not be adjusted in the future.
FNPF CEO Viliame Vodonaivalu elaborated on the restructuring of the fund, noting the separation of what was a single fund into three distinct entities as a part of the reforms initiated in 2011. The main FNPF fund, which constitutes members’ retirement savings, is invested in growth assets, while the SDB Fund and Retirement Income Fund are designated for paying pensions and death benefit claims, primarily invested in safer assets like government bonds.
Responding to Mr. Raniga’s concerns about the inability to distribute even a small percentage of returns back to pensioners from these safer investments, Mr. Saune stated that there is no risk-taking associated with pension funding. He clarified that the pension funds are maintained within government bonds with fixed terms, ensuring long-term stability but restricting flexibility in payouts.
The FNPF has witnessed a steady decline in its pension take-up rate, with an increasing number of members opting for full withdrawals or newly introduced pension products such as Pension Draw Down or Term Annuity. This shift highlights a changing landscape in how individuals are approaching their retirement savings, prompting discussions about potential adaptations to better meet members’ needs in the future.
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