Every year on 1st July, an amount of Special Death Benefit (SDB) premium declared by the Fiji National Provident Fund Board is deducted from all active FNPF member accounts that meet the eligibility criteria.
This is the annual premium for the special death benefit (SDB) cover – which is a benefit paid to the nominated dependents of the member if he or she passes away before they fully withdraw their savings within the financial year in which the premium was deducted.
In the Fund’s case, the SDB premium for financial year 2022 (1/7/2021 – 30/6/22) is $35. The premium expires at the end of the financial year, after which point, the annual premium for the next financial year would need to be deducted from the member’s General Account to ensure the member is covered for the new financial year.
The maximum SDB amount payable at death for the member is $8,500 for financial year 2022. A portion of it is allocated for funeral assistance (maximum $2,000) – however, this will only be paid if the member has filed a valid Memorandum of Administration (MOA) and has paid the yearly premium (or partly) for the financial year in which he or she passes away.
The MOA simply allows a member to access the SDB funeral assistance by nominating a person to be his or her Executor.
The SDB benefit is still payable even if members do not have a valid MOA filed with FNPF; however, the $2,000 SDB Funeral Assistance would not be accessible but would be included with the deceased member’s entitlements and paid out in accordance with their nomination schedule.
All funds that are deducted from members’ accounts for the purpose of SDB premium is managed in a specific sub-fund of FNPF – the SDB Fund, which is also invested and managed by FNPF. It is therefore, from this sub-fund that the Special Death benefits are paid from when the death of an eligible member is reported to FNPF.
What is purpose of the special death benefit?
Special death benefit provides a certain level of financial support to the dependents of FNPF members in the event of their early death; leaving their dependents financially vulnerable at the untimely loss of income.
With the SDB Funeral Assistance benefit, a portion of the death benefit is paid as soon as the advice of death is validated and the application from the Executor is received, to assist with the deceased member’s funeral expenses.
What is the total amount for the SDB benefit?
As prescribed under the FNPF Act 2011, for each financial year, the FNPF Board is required to determine the amount of SDB benefit and the amounts or rates of SDB premium based on the advice of the Fund Actuary.
For financial year 2022, the maximum SDB benefit amount is $8,500 for a $35 premium
In the event of a death occurred during FY2022, $2,000 will be allocated as SDB funeral assistance (to your nominated Executor if you have filed an MOA). The balance ($6,500) will be added to your FNPF member account balance before it is paid out to your nominee(s).
Do all members qualify for the SDB?
Members will only qualify for the SDB benefit if they meet the following requirements:
i. the member is at least 15 if he/she is not a voluntary member of FNPF;
ii. the member is at least 16 if he/she is a voluntary member of FNPF;
iii. the member has not, at any time prior to his/her date of death, withdrawn the whole amounts in their preserved and general entitlements unless that withdrawal was due to marriage under previous FNPF legislative provisions.
iv. Paid the annual SDB premium (full or partly) for the financial year in which their death occurred.
What happens if a member has less than $35 in his or her general account for the payment of the SDB premium?
FNPF deducts the required SDB premium from the General Accounts of all eligible members at the start of a financial year.
If the member’s General Account balance is less than $35, the remaining balance in the general account will be deducted. The shortfall of the SDB premium will be deducted from the General Account once new funds (e.g. contribution) are credited into it.
For a new member, $35 will be deducted once the first contribution is credited to the member’s General Account. If the first contribution amount is less than $35, further deduction will be made from the member’s General Account once new funds are credited into it until $35 has been fully paid.
In the event where member’s death occurs within that financial year, the SDB benefit payable is calculated as:
SDB benefit payable = (SDB premium paid for the FY/$35) x $8,500.
What is the Memorandum of Administration (MOA) form and why must I complete it?
This form allows your executor to access the SDB funeral assistance, if you pass away before fully withdrawing your funds. It enables you to nominate an executor, who will administer the $2,000 that is allocated for your funeral expenses. If you do not have a MOA filed, the funeral benefit allocation from the SDB scheme will not be available but the Special Death benefit will be credited in full to your account balance and paid in accordance with your nomination.
What is the difference between the SDB funeral assistance and the FNPF’s funeral assistance withdrawal?
When the member passes away, the Fund will first check if a Memorandum of Administration (MOA) form is filed. If the member has a valid MOA then $2,000 will be paid from the deceased member’s account to their MOA nominee or executor. If the member does not have a valid MOA filed, then family members can apply for the FNPF funeral assistance withdrawal. You cannot apply for both – the SDB Funeral Assistance and FNPF Funeral Assistance.
Will the SDB cover deducted from members general account, be paid back to members if they are still alive by the entitlement age at 55 years?
No – it is a premium that expires at the end of every financial year, so the $35 is the amount deducted from the member’s account qualifies the member for the SDB benefit cover for a financial year. The cover expires on 30 June, and the cover for the following financial year needs to be renewed.
What is the difference between Memorandum of Administration and Memorandum of Nomination?
The Memorandum of Administration gives authority to the Fund to distribute the SDB Funeral Assistance portion to the member’s nominated Executor, to be used for financing the deceased member’s funeral expenses. The Memorandum of Nomination instructs the FNPF on the payment of your FNPF savings (which would include the balance of the Special Death benefit, if any) to your nominees upon your death.