Facing widespread critique over his 2024-25 Budget, Minister of Finance Professor Biman Prasad has acknowledged the need to address the grievances of Fiji National Provident Fund (FNPF) pensioners affected by the 2012 reforms imposed by the previous Bainimarama government. Prasad aims to provide a solution, albeit controversial, to restore the pensions cut in 2012 but without backpay.
However, the remedy proposed appears insufficient as it only partially addresses the issue. It promises to restore pensions for those who accepted a reduced rate starting August 2024, with $4 million allocated this year and an estimated $57 million over the next two decades. This measure has overlooked other affected pensioners who opted to withdraw their funds due to the reduced rates.
Former USP lecturer Dr. Ganesh Chand and ex-public servant Rishi Ram have highlighted on social media that this solution penalizes those who withdrew their funds. Ram advocates for the restoration of original pensions along with interest, deeming it a fair and just approach.
Businessman Mark Halabe questions why taxpayers should bear this restitution instead of the FNPF board. Prasad’s response cites an Act passed by the previous government that bars court challenges to those decisions, a justification deemed inadequate by critics.
Key facts of the 2012 pension issue are as follows:
1. Two groups of 2012 pensioners were affected, both losing out financially due to the government’s actions while FNPF gained.
2. The original pension contracts, authorized by the 1997 Parliament, were binding and not subject to unilateral alteration.
3. These pensioners were promised fixed pensions, with terms stipulated in FNPF documents.
The current solution only partially compensates those who opted for reduced pensions (Group A). It neglects those who took a lump sum (Group B) and fails to address the arrears owed to both groups, including deceased pensioners denied legal recourse due to the Bainimarama decrees.
FNPF benefited from the pension cuts, accumulating significant savings annually since 2012, which suggests that restitution should be their responsibility. The fiduciary duty of the current FNPF board, chaired by Daksesh Patel and comprised of members like Adish Naidu and Shiri Gounder, should involve:
1. Acknowledging the illegality of the 2012 actions.
2. Compensating affected pensioners or their beneficiaries.
3. Paying arrears in manageable instalments.
This approach ensures a fair resolution without unjustly burdening taxpayers. The financial impact on FNPF would be manageable, given their current financial health and past investment decisions.
The call to action is clear: the FNPF board should take the ethical step of righting this historical wrong, ensuring justice for the affected pensioners. This would genuinely close the chapter on the 2012 pension debacle, reflecting responsible fiduciary management and upholding the integrity of the fund.