Sunday, June 19, 2011

FNPF Lies & Unethical Leadership Exposed as Chaudhry Voices Opposition

Posted by Raw Fiji News - 19 June 2011

FNPF executives claim that present members are subsiding pensioners is a big lie : FICTU

FICTU chief Attar Singh
By Elenoa Baselawa
THE Fiji Islands Council of Trade Unions was one of the last to make its submissions on the proposed Fiji National Provident Fund reforms.
Friday was the final day of public consultations for the FNPF as it prepares to start implementing some of its proposed reforms from July 1.
Assistant general manager prime services, Tevita Nagataleka, addressed the Fijian Teachers Association and briefed them on the proposed reforms in the afternoon.
The question of the timing of the reforms had been raised at many of the public consultations where the FNPF’s response had been the same – the present pension rate is unsustainable and the reforms must be carried out now to ensure the sustainability of the fund in the future.
This was again reiterated by Mr Nagataleka when the question was again raised at the Suva Civic Centre.
The pension rate suggested by the FNPF is around 9 per cent.
FICTU said this would immediately impact some 11,000 pensioners who would have their pensions reduced by 40 per cent (if they are on the 15 per cent rate) or 64 per cent (if they are on the 25 per cent rate).
“Effectively, a pensioner on a present monthly pension of $1000 would only receive $600 if he or she was on 15 per cent annuity and only $360 if he/she is under the 25 per cent when these changes are implemented,” FICTU said.
“It should be noted that large numbers of workers in Fiji around 65 per cent earn wages below the poverty line.
“Under the proposed 9 per cent, a retiring member with a healthy standing balance of $50,000 at the end of their working life would merely receive $86.53 per week. How can a family live on such small income?
Mr Nagataleka presented a table on the proposed changes and its effect on members.
The table proposed different rates at different retirement ages.
But while the FNPF acknowledged the differing wage levels in the country, it posed the question on who would pay if pension rates were maintained.
FICTU in its submission had also raised the buffer fund balance which accumulated to $230 million from 1975 to 1999 when it was transferred to the general reserve in 1999.
Mr Singh questioned the FNPF on why it had not disclosed these information and claimed the omission was a poor attempt to convince the present members of the “myth” that their contributions were now subsidising the existing pensioners.
“The facts don’t support this as total principal contribution of $525m is yet to be exhausted.
“Therefore, the question of subsidy does not arise. These figures do not include interest earned since 1974.
“FICTU proposes that a sum of $596m be taken out of the General Reserve Account and put into the Pension Reserve,” Mr Singh said.
The FNPF presentations at the public consultations however had included a graph showing the declining pension buffer balance presently at about $50m.
“The resultant balance of ($703m) is the true and fair entitlement of the pension scheme.
“Alternatively, as previous studies had done, treat the General Reserve Account as the Pension Reserve for the purpose of evaluating the sustainability of the pension scheme and providing existing benefits.
The other issues raised by FICTU were as follows:
Life expectancy rates
The FNPF in its projection had used the life expectancy of 74 years for males and 78 for females. These figures do not reconcile with the last bureau of statistics figures for Fiji. Therefore, it would be grossly misleading to project viability on prolonged life expectancy which is not supported by verified facts.
These misleading variables would cause distortions in the viability trends and would lead to questionable conclusions, and reduced pensions. The ILO report of 2002 (page 18) said life expectancy was likely “to increase to 73.2 for males and 77.9 for females by 2030″.
FICTU has questioned FNPF on why it was using 2030 figures for life expectancy now. At the FNPF symposium last month, FNPF consultant Richard Codron of Mercer said he based his calculations on World Health Organisation figures.
Increased contribution
An increase in contribution by members and employers by 1 per cent each after the 2014 Elections in 2015 and another 1 per cent in 2020 to avert the trend depicted above.
“This is also supported by Promontory Financial Services Group Australasia. With the increased contribution, natural increases in wages and salaries combined with economic growth targeted by the Government and, the 6 per cent interest income from pension standing balances of $703m as shown, the fund would clearly see growth in the future. Scenario with increased in contribution by 4 per cent by 2020,” Mr Singh said.  

Can FNPF members trust their money with this unethical man Aisake Taito?

Kesa Strieby
FNPF CEO Aisake Taito

EXPOSED ! Kesa Strieby, the Fijian lady in Cairns who is Taito’s mistress

This is Aisake Taito, the CEO of Fiji National Provident Fund.
This is the same man who is entrusted by Frank Bainimarama and his illegal appointed FNPF board, together with Jaoji Koroi and Waqairawai, to deny FNPF members rights of their fair return on investment on at least 8% of their hard-earned income they’ve been forced to contribute towards this superannuation scheme.
As Fiji’s biggest financial institution,Taito holds a very responsible office, one that demands high ethical values that should project trust-worthiness and wisdom to its members.
But like most Fijian so-called leaders, he has been found lacking in the ethical side of things by engaging in unethical activities that contradict the moral high ground of most of its members.
We have only recently observed how America rebuked and fired their cheating governors, senators, IMF ex-boss and other high profile people when they were caught with their pants down.
Frank Bainimarama tried to apply the same principle with his two senior officers Pita Driti and Ului Mara by sacking them, even-though he himself was not too faithful to his wife Mary all the time.
Will he do the same with his FNPF CEO?


FNPF current rates of annuity must be protected : Mahendra Chaudhry

Deposed SDL/FLP multi-party government member Mahendra Chaudhry
Current rates of annuity must be protected
The proposal to reduce the pension rate is neither warranted nor necessary, and will be a gross injustice to the workers ofFiji. It can be avoided if the proposals in these submissions are implemented.
The existing rate of pension must be protected and enhanced. It is wrong in law to alter pensions to the disadvantage of the recipient.
Pensioners have made commitments based on their current rate of pension – drastic cuts to the rate now will create considerable hardship, particularly, as FNPF’s pension is not indexed to the cost of living, and is generally inadequate for 65% of the Fund’s members who are paid below poverty line wages.
Lump sum withdrawals
The option to Lump Sum withdrawal on retirement should be left open to the members. If they wish to withdraw the total sum standing to their credit then so be it. They must not be forced to convert it into an annuity against their wish.
Withdrawals on Migration
The proposal by the consultants to withhold a members’ contribution on migration or have it transferred to a similar retirement scheme in the migrant’s new country of residence, under negotiated reciprocal arrangements, is not supported.
Nor do we support the recommendation that where no reciprocal arrangements exist, the amount standing to the credit of the member be withheld for a waiting period of 12 months (para 76 of the Policy Paper) to ensure that early payment for the purpose of migration is genuine!
An exception is made where the amount standing to the credit of  the member is small, in which case it can be released on migration to save the Fund the cost of small value accounts.
The raison d’etre for introducing the provision is that a member declaring that he is migrating, is able to withdraw his funds only to return in 1 to 2 years to rejoin the Fund.
We find this proposal or intended restriction on a member to access his savings upon migration a violation of his rights. The consultants admit that hard data on this “was not reviewed” but, astonishingly enough, go on to recommend that “… a policy may nevertheless be formulated and supported by Law without the need to quantify the size of the problem”.
This is a most irresponsible approach, particularly when the intention is to deprive some one of his entitlement, albeit temporarily.
In most cases, those migrating need the money to set themselves up in their new country. It can be an expensive affair and they have a right to utilize their savings to meet this contingency.
If for some reason, the person returns after a while and seeks to rejoin the Fund upon being re-employed, we don’t see anything wrong with it. He would be a new member, beginning afresh, and would not carry forward any of his previous benefits – so what is the fuss about?
In my view, this proposal is harsh and without justification, and should be rejected.
In any event, it does not make sense to withhold the savings for a short period of 12 months, as recommended. Hardly anyone migrating is likely to return within that period.
Indexation on Pension to the cost-of-living
Currently, the FNPF pension is a fixed lifetime sum without any provision for its indexation to offset increases in the cost-of-living. As a consequence, the real value of the pension undergoes significant reduction over a period of time. It is estimated that over a time frame of 7 years, the erosion in the real value (or purchasing power) of the pension could be as high as 25%, calculated at 3.5% annual inflation compounded.
As an example, the purchasing power of a monthly annuity (pension) of $200 will reduce to approximately $150 by the end of the seventh year.
FNPF should take immediate steps to formulate an indexation scheme to supplement increases in the cost of living. It is necessary adjunct to providing financial security in old age as is the object of the Fund itself.
FNPF should seriously consider expanding its range of benefits/services into areas such as health care, home financing and insurance. Such schemes are provided by a number of provident funds abroad enabling their members to obtain these services on considerably advantageous terms.
Mahendra Chaudhry


No comments: