The Fiji National Provident Fund (FNPF) has warned that if the full range of demands advanced by some former pensioners were to be implemented, the cost could potentially approach $700 million, subject to verification and actuarial assessment.
And the Fund added that ultimately, that massive cost would have to be borne by current members, future members, taxpayers, or some combination of all three.
In an article responding to recent public commentaries about the legacy pension issue — that have continued more than a decade after the FNPF pension reform, the Fund said that potential financial burden posed a direct threat to the retirement savings of more than 440,000 members whose savings had been entrusted to the Fund, and who had a reasonable expectation that their savings would be protected and managed in their best interests.
Defending its past actions, the FNPF stated the pension reforms were implemented because existing arrangements were not sustainable.
“They were designed to stop an increasing burden from being transferred to other members and future generations of contributors. That responsibility remains unchanged today,” the Fund said.
According to the Fund, between 1975 and 2011, pensioners affected by the reforms collectively put in $318m but received approximately $762m in return.
It said by the time the reforms were introduced, the original funds had long since been exhausted and payments had continued well beyond the amounts originally contributed.
“In aggregate, payments exceeded original conversion sums by approximately $444m.”
The FNPF emphasised that those additional payments did not arise solely from the original conversion sums.
Instead, they were supported by the wider Fund and, ultimately, by resources that would otherwise have been available to other members, it said.
The Fund’s preliminary analysis indicates that 36 (out of the 1400) former pensioners who have received taxpayer-funded support since 2024 had, by June this year, already received more than $500,000 each above the value of the conversion sums originally used to fund their pensions.
Stressing that retirement savings are not an unlimited public resource, the FNPF noted that those savings belonged to hardworking members who contributed throughout their working lives.
The Fund said that the question now facing policymakers was whether it was fair to transfer additional costs to more than 440,000 members whose retirement savings must also be protected.
