OVER 200,000 Fiji National Provident Fund (FNPF) members, representing close to half its membership, have up to $5000 balance in their accounts.
Of those, 10,261 are aged between 50 to 54 years old and close to the FNPF retirement age of 55.
This was revealed in FNPF’s 2024 annual report and has stirred fresh concern over low member balances, with a member raising the issue at the FNPF members’ forum held at the Grand Pacific Hotel in Suva on Tuesday night.
The member questioned whether the Fund had a strategy to help these members grow their balance.
FNPF general manager Member Services, Alipate Waqairawai said the issue of low member balances was a legacy of the preservation policy prior to the FNPF pension reform in 2014, in which members were allowed to withdraw two thirds of their funds, which led to many withdrawing for various grounds that were allowed at the time.
“When we were doing the reforms and we looked at the fund, it was established in 1966, so for a fund that’s now 59 years old, if it started in 1966, then it should reflect in the member balances.
“However when we looked at the balances of our members, a majority of our members had balances of less than $5000. In fact, a bulk of our members. So, what was wrong? When we looked at the root cause, the root cause was because our preserving policy was such that that members, during their working life before they reach 55, they could withdraw up to two thirds of their monies.
“And there were 23 grounds of withdrawals. Everyone would run to the fund for kau ni matanigone, tevutevu, wedding, you name it, everyone would run to the fund.
“So what we did was switch the preserving policy. Now you can only withdraw up to 30 per cent of your funds and the bulk of your fund, which is 70 per cent, was preserved for your retirement, which is the case now.”
Mr Waqairawai said they now notice a change in mindset among members, who now prefer not to withdraw their funds “given the interest rates that they are receiving, the accumulation that they’ve noticed is accumulating quickly in their accounts, the drive for additional contributions and other incentives that we are telling them to grow their funds.”
In his presentation of FNPF’s 2024 financial results to members during the forum, FNPF chief executive officer Viliame Vodonaivalu said the Fund collected a total of $779.8million in contribution, an increase of some $238m from $541.5m collected in 2023.
“The increase in contribution is linked to more members making additional and voluntary contributions,” he said.
