- May 1, 2009
- Posted by: fnpf_editor2
- Categories: Media Articles, News & Media
The Fiji National Provident Fund Board today announced major changes to its Withdrawal Policies as it continues to strengthen and add value to the retirement benefits of its members. Board Chairman, Mr Parmesh Chand, says the revised policies will boost members’ savings, allowing them to accumulate more for retirement.
“The revised policies are in line with changes that have continuously been implemented by the Board since 2007 when it started reviewing FNPF’s strategic direction,” Mr Chand said.
“We’ve had to go ‘back to basics’ to re-assess our objectives. The Fund’s core function is to ensure members’ funds are collected, invested to grow so that they are financially secure when they retire.
“However, the Board noted that over the years the Fund has deviated from this role as it allowed members to access pre-retirement withdrawals under various grounds.
“The theme of the Fund’s Strategic Plan for 2009-20011 is Repositioning the Fund for the Next Decade; and these measures are an affirmation of the Board’s plans for FNPF.”
Mr Chand assured members that members’ interest remained paramount when the review was undertaken.
“As trustees of members’ savings, the Board needs to ensure that members are financially secure after their work-life; that is the basis of our appointment,” Mr Chand said.
“Whilst we understand the current economic challenges facing our members, the FNPF Board notes, with concern, the extent to which members continue to rely heavily on their retirement savings to often fund consumption expenses.”
“This mindset about the Fund needs to change. FNPF is neither a welfare body nor is it a Bank.”
Mr Chand said that employers, who contribute eight per cent to members’ retirement fund, have also expressed their concern over withdrawals by workers.
“Employers have argued that these funds are deducted specifically for workers’ retirement.”
He added that the International Monetary Fund and the World Bank have also warned against excessive withdrawals by members as this was a deviation from the Fund’s core function.
Under the revised policies, members will now have to pay a $20 processing fee for all partial withdrawals.
The Fund will no longer assist members for pre-retirement assistance.
Currently, FNPF allows members to withdraw $5,000 when they turn 54.
It has also suspended the Small Business Equity Scheme (SBE) and restricted members to accessing $10,000 for Share Investment Schemes.
“Unfortunately, members have not been able to sustain their businesses under the SBE and a majority of them have returned to the Fund to request funding for the payment of arrears.”
The Board also revised these grounds:
• Local Education Assistance – Short courses will no longer be funded under this ground and funding of members’ siblings’ children is no longer applicable. Accommodation will now be benchmarked to USP’s small room charge and maximum assistance under this ground will be $2000 per child per semester. Members can only use their education eligibility.
• Overseas Education – Members can only use their Education eligibility for this purpose.
• Low Wage Income – This is offered only once a year and members can only use their education eligibility
• Medical Local/Overseas – the Fund will no longer assist members’ siblings and siblings’ children. This is restricted to partial eligibility.
• Funeral Assistance – Fund will not assist those applying for their siblings’ children funeral expenses. Maximum assistance is limited to $1500.
• Employment Opportunity Overseas – Maximum for this is $5,000 and only partial eligibility can be accessed for this assistance.
• Short-Term Re-employment for TOD – Members can only utilise their partial eligibility; maximum $500
• Re-settlement Overseas on Provisional Residency Visa – Members can utilise a maximum of $10,000 from their partial eligibility.• Unemployment Assistance – This will now be limited to only one withdrawal of $500 per annum.
• Re-employment for Security Services – assistance will no longer be offered to members’ siblings or siblings’ children, members can only utilise their partial eligibility limited to $5000 per child.
“The Board, as custodian of these funds, is convinced that these revised measures are short-term pains for long term gains. We urge members to save for retirement.”
These changes come into effect on 6 April, 2009 with further amendments envisaged progressively.
For more information, please contact:
Manager Public Relations & Corporate Communications
323 8459 or 999 8104 or on email: WainikitiB@fnpf.com.fj