Authoritarian rule over workers’ money
July 8, 2022
The governance of the Fiji National Provident Fund continues to be authoritarian with exclusive government control of a Fund owned 100% by the workers of Fiji who don’t have any say whatsoever on how their Funds are invested, said National Federation Party Leader Professor Biman Prasad.
He was responding to a statement by the CEO of FNPF that it doesn’t have to disclose to stakeholders and Fund members of its intentions because of the non-disclosure agreement. This follows questions raised as to why FNPF did not inform its members of its intention to purchase 30.02% shares in Fiji Airways, which was first announced by the airline’s CEO and then by the Economy Minister Aiyaz Sayed-Khaiyum.
“Non-disclosure agreement with who?” asked Professor Prasad. “Commercial deals must be done in confidence when there is competition for an opportunity or other reasons for commercial sensitivity. And private companies, using their own money, owe no duty of disclosure to anyone else”. “But this is completely different. This is the pension fund owned by tens of thousands of Fiji workers. They deserve to know how their money is being spent. And nobody else is competing to buy shares in our struggling national airline”. “Therefore this excuse is flimsy, lame and clearly an attempt to evade transparency and accountability”.
“Until 25th November 2011, the workers of Fiji had a say in how their funds were used through representation on the FNPF Board. But this changed after a Decree was promulgated changing the governance of FNPF, making the Fund 100% owned by workers, to be 100% controlled by Government”.
“The workers have zero influence or control of their own hard-earned savings”. “What Government and the FNPF Board should be doing is to look at ways to fully replenish funds used by members for rehabilitation following Severe TC Winston as well as survive following the onslaught of Covid”.
“The members had to dig into their retirement savings because government couldn’t fulfill its role of social obligation to the people”.
“In fact the International Monetary Fund, in its Report of February 2019, had recommended that the pension savings of FNPF members withdrawn by them after Severe TC Winston should be rebuilt. This was 13 months before the first wave of Covid in March 2020”. ”The IMF stated that it was important to lay out a strategy to restore these pension savings to ensure that contributors will eventually have access to adequate pensions, especially given that a large fraction of pension members have relatively low pension saving balances at present”.
“The 2021 FNPF Annual Report shows that 58,712 Members had zero balance in their accounts. 188,288 Members had a balance between 1 cent and $5,000”.
“Therefore, 55.29% of FNPF Members or 247,000 out of 446,658 Members had balances between zero and $5,000 in their accounts”.
“This should concern anyone, let alone the Board of a Fund with the core objective of providing social security”.
“But we don’t expect a Board appointed by a heartless government to do anything about this”.