I normally do not react to anonymous criticisms of what I write. I will respond to this one- because the FNPF management has also similarly selectively quoted me from what I said in Parliament (all there in Hansard of 13 August 1998, pp. 499 to 505). 

The Fiji Government in 1998 Parliamentary had proposed to gradually reduce the single pension annuity rate from 25% to 15% by one percentage point per year.  This is what I said (and the Hansard shows that I was even attacked by my own NFP colleagues in Parliament then): 

“Once you realize that the funds are not sustainable at 25% and you conclude that, through actuarial studies that the real sustainable rate for the funds is 15% of your final balance to be given as pension, why do you not bring in that change straight away because if it is not sustainable, it is not sustainable. You are saying that those young people who are working now, and who will be working over the next ten years, will be contributing out of their income to maintain us older people at 25 percent or 23 percent, but when it comes for them to retire they will only be getting 15%”. 

It was my professional view then, as now, that the annuity rates above 15% should not have been offered by the FNPF Board, and Parliament should not have approved that change.  But they did. 

1.  These single annuities above 15% were 

            (a) good business gambles for those who lived on long enough 

            (b) bad business gambles for those who died early; 

            (c) bad business decisions by the FNPF Management and Board then (who may have had conflicts of interest), and Parliament which approved that recommendation. 

2.  But once these rates above 15% were verified by Parliament in the Laws of Fiji, and offered by FNPF quite explicitly on the OP-9 form, they became lawful  contracts which cannot be broken. 

3. Nowhere in my 1998 contribution did I say that existing contracted pensions above 25% should be arbitrarily reduced to 15%. 

4. The current FNPF/Regime proposals are about further reducing the annuity from 15% to 9%
            (a) without the approval of the Fiji Parliament,

            (b) with the public being denied all the actuarial studies and reports on 
                FNPF investment disasters 

            (c) unlawfully reducing the existing annuities already contracted by FNPF. 

To try to selectively quote my 1998 parliamentary views to justify the current actions by the FNPF and the Regime (as even FNPF management has often attempted) is thoroughly dishonest.

 

Advertisements