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Grey Power: Two hundred thousand Pensioners and FNFP Contributors will form powerful "voting block" if and when elections are held in Fiji

20/2/2014

6 Comments

 
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PictureNarsey
By Professor Wadan Narsey

The Fiji National Provident Fund (FNPF), is the largest financial institution in Fiji in terms of assets, bigger than the commercial banks combined, and the largest lender to the Fiji Government.

The members of the FNPF (current contributors and pensioners) number around two hundred thousands, or roughly 40% of all the voters for the coming elections in Fiji. They represent an extremely powerful “voting block”.

The Bainimarama Government recently defended their extra-legal policy changes at FNPF. They claimed that previous governments had used the FNPF as their  “piggy bank” (Fiji Sun, 7 Feb. 2014).

This last statement is certainly correct, but that criticism can equally be leveled at the Bainimarama Government itself, with more serious criticisms, including their massive reduction of pension rates from 15% to 9%.

Further, despite being in control for seven years, this Bainimarama Government has done nothing to ensure that future governments will not be able to control and use the FNPF as their “piggy bank”.

Mismanagement of FNPF

This Bainimarama Government is an unelected government which seized power through a military coup in 2006. Marginalizing both unions and employers who used to nominate their representatives to the FNPF Board, the Bainimarama Government appointed all the FNPF board members, some of whom have been non-citizens, and some who have Permanent Residency in other countries.

By military decree the Bainimarama Government and the FNPF Board, forced through a massive decrease in pension rates of all pensioners.

The FNPF propaganda has focused only on those who used to enjoy admittedly over-generous rates above 15% (to as much as 25%)- but even these were voluntarily offered by FNPF as legal contracts and accepted by those pensioners.

But the official propaganda ignores the more significant reduction of future pension rates from 15% to 9%, with grave public doubts about the fairness of the 9% rate.

Existing pensioners who chose not to accept the 9% pension rates were forced to withdraw their original sums, despite a clear legal contract being in place between them and FNPF.

These reductions were forced through, despite the fact that the pensioners’ had mounted legal challenge, which had been accepted for hearing by Fiji’s High Court.

The FNPF  management, against all rules of good corporate practice, have arrogantly assumed the right to state and justify major changes in FNPF policies, which should properly be the domain of a lawfully appointed Board.

Even private expatriate consultants from Australia and NZ, have justified the policy changes through the media, implicitly supporting the unlawful military decrees.

The FNPF Board has mismanaged a number of major investments, in particular those at Natadola, Momi and the GPH, resulting in the writing down of hundreds of millions of dollars in assets. Undesirable loans have also been made, such as to Fiji Sugar Corporation.

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Momi Bay project lies dormant

The FNPF Board and Management have refused to release any of the reports of inquiries into the mismanagement of the investments, making a mockery of the frequent claims of transparency and accountability made by the FNPF Board and the Bainimarama Government.

What voters should ask political parties:

Voters in the coming elections must make the governance of FNPF an important election issue.

Voters must ask all political parties, including any party that Commodore Bainimarama might set up, what their policies will be on a thorough reform of the management of FNPF, including the following:

(a) Two thirds of the  Board of the FNPF (and the Chairman) must be elected for five year terms by the members of the FNPF.

(b) The legal case that pensioners had in the courts must be reactivated, with the judiciary requested to hand down a lawful solution to the case, which could include (c) below.

(c) The FNPF Board commission a thorough independent review that recommends a fair pension rate that is consistent with the long-term sustainability of FNPF.

(d) To strengthen accountability and transparency of the FNPF Board, all reports into the mismanagement of FNPF funds as well as the reports that have justified the recent changes in pensions, be made public.

Readers may wish to refer to some of my previous posts on FNPF and its activities in the Fiji economy here:
https://narseyonfiji.wordpress.com/?s=FNPF

and in particular
https://narseyonfiji.wordpress.com/2012/03/18/fnpf-transition-decree-last-nail-in-the-fnpf-coffin-2011-blog/
or the full Report for the Burness/Shameem case:
Narsey Report for Burness-Shameem case 13 August 2011.
6 Comments
Rose Chand
20/2/2014 04:35:40 pm

Wadan, why you never complained when you were paid twice the amount you qualified for by FNP?

We paid for you just for nothing - return our money then you and FNPF go and solve your conflict.

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Keep The Faith link
21/2/2014 01:55:45 am

Precisely Victor. The illegal & treasonous regime have no idea about the festering ire of the voting populace.

All their failed policies stemming from 8 years of tyranny, non-transparency and graft are about to be regurgitated and translated into votes against them.

If they're banking on rural and diasporic votes they obviously still have no idea.

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biman
21/2/2014 02:03:46 am

I beg to differ with Prof Narsey.

Of the 200,000 or so members, less than 5,000 were affected by the pension reform adversly with a reduction in their pension rate. Those receiving below $200/month did not lose out. In fact, those receiving more were lucky to get their full balance after taking 4-5 times that already.

The majority of members are lust happy that the reform means that their savings will not be lost. They will get their funds on retirement and not be eaten up because of the current pensioners dipping into their balance.

Hence, people should and will vote for the reform as it benefited them.

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Keep The Faith link
21/2/2014 02:57:06 am

That's really astoundingly entertaining 'Biman' to suggest that the majority of the members of the FNPF superannuation scheme are content with the status quo.

How have you managed to arrive at this assumption? Did you do a survey?

It is quite a stretch to imagine that the non 5,000 members unaffected by the FNPFs flawed reforms being ecstatic when they see:
1) their pensions without any independent oversight being used by the national airline to help purchase aircrafts (no public data given either as to what returns they can expect);
2) their pensions bailing out ATH in the ourchase of a piece of real estate (no public data as to what returns they can expect);
3) their pensions being used to become burdened with offshore real estate of the State (no public data as to what returns they can expect);
4) their pensions being 'loaned' to the illegal & treasonous regime in their operational shortfalls (no public data as to what returns they can expect;
5) their pensions being used to co-finance the construction of a massive commercial complex with Tappoos (no public data as to what returns they can expect)

... the list goes on!

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shanil
21/2/2014 12:18:34 pm

M no fan of Biman but I agree with him that FNPF reform is the best thing for its sustainability.

Keep the faith's response reflects his hatred for the IG rather than the good that even prof narsey, iLO, IMF had recommended. No govt had the balls to do it b'cause of their own self interest.

The reform means that the future generations pension is saved.

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Keep The Faith link
21/2/2014 10:10:37 pm

Oh wot? Another regime troll like 'Biman' trying to shoot the messenger from the comfort of China 'Shanil'. Could you be any more obvious?

I don't hate the regime. I hate treason, illegality, unlawfulness, corruption, nepotism and daylight robbery from unelected thugs who just happen to control the State's armory.

I don't blame you for parroting the party lines about 'saving the pensions for future generations' but you will obviously struggle to grasp the deeper nuances of why this was a bad idea.

美好的一天 Shanil and Biman.

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