If passed by Parliament next week, the Fiji National Provident Fund Board will have the authority to reduce the percentage in special death benefits. This provision is outlined in the Fiji National Provident Fund (Budget Amendment) Act 2024, introduced in Parliament as part of the 2024-2025 budget process.
The Bill specifies that such a reduction in special death benefits will only occur in the event of a “catastrophe.” According to the Bill, “As soon as reasonably practicable after the Board has declared a catastrophe, the actuary must recommend to the Board a reduction percentage.”
The Board may then declare this reduction percentage based on the actuary’s recommendation, and the minister may approve it. If the minister approves the reduction percentage, all special death benefit amounts related to deaths occurring between the minister’s approval date and the end of the following financial year (or a period between 12 and 24 months) will be calculated using a specific formula: “Standard Special Death Benefit Amount x Reduction Percentage.”
The Bill notes that the reduction percentage can be decreased at any time between the declaration and the end of the following financial year but cannot be increased.
A “catastrophe” is defined as one or more events expected to result in a total cost of claims for special death benefits, estimated by the actuary, that exceed a prescribed limit within a financial year. The Board can declare a catastrophe if it receives advice from the actuary that the conditions for such a declaration have been met.