The Fiji Trades Union Congress has called on the Fiji National Provident Fund to review its policy on deposits and annual interest distribution, claiming the current system unfairly benefits wealthy members.
FTUC National Secretary Felix Anthony said concerns had grown since FNPF began allowing voluntary deposits in addition to normal member contributions.
“We are aware that large sums of money are being deposited by those that can afford and obtain overnight high interest rates such as one declared last year at around 8.25 per cent while the bank would only give between 1 per cent and 2 per cent interest,” Anthony said.
He said the disparity in earnings highlighted growing inequality within the system.
“A member with $40,000 would have got an interest of $3,300 while a member with $1,000,000 would have received $82,500 as interest payment,” he said.
Anthony claimed only a small percentage of members held large balances but benefited disproportionately from the current structure.
“Of the 436,860 members only 4,062 members have savings of $100,000 or more up to more than a million dollars which accounts for only 3.6 per cent of FNPF members,” he said.
“These are the ones who get the real cream from FNPF with the current FNPF policy on deposits.”
Anthony said the current policy was widening inequality.
“The current policy actually promotes inequality and extends the gap between the haves and the have nots. Put simply it is a policy to make the rich richer,” he said.
The FTUC is now calling for lower interest rates on large deposits compared to compulsory contribution balances, arguing that FNPF should refocus on its core role of providing decent retirement support for ordinary workers.
