GIVE us our money!
This was the consensus echoed by pensioners attending the Fiji National Provident Fund (FNPF)’s annual member forum at the Grand Pacific Hotel on Tuesday.
Claims of cheating, stolen monies and dissatisfaction also reverberated among the elder pensioners, who felt the FNPF reforms of 2012, which led to decreased pension rates, literally left them “paupers that lived under the poverty line”.
Parallels were drawn to mark the struggles of the late David Burness, the man who challenged FNPF’s 2012 decision in court and represented hundreds of pensioners in doing so.
At the forum on Tuesday, pensioners also said they could not speak out of fear before, but times had changed now.
“Take us back”
Diwan Chand, a retired school principal, vented his frustration to the management and asked what concessions pensioners could receive and whether a deal would be struck with Government to take them back to the previous “legally bound” pension agreement.
Questions were also raised whether the restrictions imposed by the previous government would be removed as it would affect other pensioners coming through.
“While the government pensions get their cost of living adjustments, the FNPF pensioners get nil, zero,” Mr Chand said.
“I think this is grossly unfair for a country which talks about the human rights, when talks about justice, and it talks about equality and talks about what is Fijian, and I think it is very un-Fijian to be depriving a group of senior citizens whose pension is stagnant.
“Is there any chance of us going back to the legally binding pension that we had signed? We were shut off through the use of a decree to take the matter to court. We have not been able to open our mouth, because we can’t go to court. Now, is there any hope of us getting a fair deal, under this new Government?”
In response, FNPF chief operating officer Pravinesh Singh said rather than a restriction, it was a reform that was done on the pension business.
“There were various reasons as to why the pension business was reformed,” he said.
“That included the sustainability of the pensioners, as well as the sustainability of FNPF. And in the past many forums, we’ve explained as to why the pension reform was needed to be done. It was to save the fund from going broke.”
He said there were still talks with the Government and no decision was given to FNPF thus far.
“The dialogues are continuing and there’s no clear outcome on that so we will wait to hear from our line minister and if there’s any progress in that, we will definitely come back to the pensioners.
“Whether there will be any cost of living adjustment. Our pension is a single and a joint life pension and it is a life pension. So it is not indexed as such. So there will not be any cost of living adjustments.”
Pension Funds
Retirement funds looked after by FNPF are restricted on fixed income and guaranteed return.
This was the clarification made by FNPF chief executive officer Viliame Vodonaivalu in response to queries from pensioners about whether their funds were used in investments such as hotels and tourism.
Mr Vodonaivalu said promised returns were not done on other funds.
“I’ll answer it from an investment perspective; in fact we run three funds separately,” he said.
“One is a pre-retirement fund, and we run the pension fund separately. Whenever we run a pension fund, we made a promise to you on the return. We don’t do it on the other funds. The other funds, we invest in more risky investments, so we do equity investment and we can’t promise them.
“So every year, we reset the rate, depending on the return we earn from the other side. But for retirement fund, we are restricted on fixed income and guaranteed return. That’s why we’re able to promise you that the rate that you will buy on an annuity or life is fixed for a year.
“The other members for pre-retirement, the portfolio is run differently. So we don’t promise them a return. The return that we get in a year, that’s the one that we provide to them, provided the solvency has been gone through the actuaries review and only the balance we can allocate, that’s the one we pay them.”
He also said they would never invest pension fund on any hotels.
“So if we had done, we would have got hit with COVID, you will probably be receiving negative numbers. So we were receiving nothing from the hotels because of the risk that year.
“So for pension fund, is fixed income that we invest because we’ve got a promised return from the seller so that we offload to pensioners.”
Who is to blame?
Former Fiji Council of Social Services executive director Mohammed Hassan Khan questioned FNPF management why the 2012 reforms were carried out.
He claimed this was a way to pass the losses to the members.
“You have robbed us of our legitimate and legal right of the pension and you talk about not passing it to the members,
you have cheated us, you have broken the law,” he claimed.
“You’ve robbed us. You made us below the poverty line. And you talk about pass it on. But can you say that you will not pass it on to members? You have robbed us. The other matter is that this was pushed on us by a decree. Why has FNPF not tabled it to the elected parliament?
“Why has it nit been done?”
FNPF chief operating officer Pravinesh Singh said he understood the position of the pensioners.
“There have been a lot of reports done by World Bank, International Finance Corporation (IFC) that have clearly
stated that the pension rates that were offered to the pensioners in those days were very generous, by any standards,”
he said.
“If we were to benchmark to any other jurisdiction, our pension rates were not sustainable. That’s why we had to make those changes. What about the cases where we’ve paid four times, five times over the principal?
“There was a decree in place. And that was also legally binding and we had to save the fund, we had to save the Retirement
Income Fund. Otherwise, the pensioners today present in the room would not be receiving any pension.
“We had given a choice to all the pensioners in that year, if you do not want your money, if you do not want to rejoin the scheme, every single cent that you had invested in the first place, the fund
was going to return you the principal back.
“Yet three quarters of the pensioners chose to come back, because they knew the rates that were still offered, the revised
rates, were still good by way of any comparison.
“Yet, we said ‘if you want, we’ll give you money back’. So there was no robbery in that instance. There were cuts, there were pension cuts, I understand, but there were a number of pensioners who were maintained on their original rates.”
Mr Singh also said they had to be mindful of the fact that those changes back in 2012 “needed to be done”.
“Otherwise, we would not have been here today. There were cases where I earlier alluded, we paid five times the original sum that was put in place. If that continues to happen, the fund will
not be able to sustain even the current pension.
“But as for now, I cannot say that the revised rates will be reinstated or there will be any changes. That’s not within our ambit.
“If the Government of the day decides otherwise, then we’ll have to wait for the line minister to make any such changes.
