Pensioner’s Petition for Justice to the Prime Minister of Fiji

Petition summary

The pensioner signatories:

• Believe they have been discriminated against and treated unjustly and unfairly by the Fiji National Provident Fund (FNPF) and the Government in the changes to the Fund’s pension system.
• Contend that their existing pension contracts have been broken by the FNPF and wish to have this, and other issues, addressed in court. As a first step they request support from the Prime Minister to deal with the gross injustices of the Transition Decree and the substantive FNPF Decree that follows it.
• Assert that their fundamental rights have been breached in a number of areas and that the changes are also in violation of the Peoples’ Charter which provides the guiding influence for overall Government policy.
• Call for the establishment of a full independent inquiry to consider and make recommendations on all the issues, contradictions and discrepancies that surround the actions of the FNPF in its proposals for change.
• Seek constitutional support for the rights of pensioners.

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 Please read the full text of this important petition and give your support by clicking on the ” COMMENT” section and adding your name, and if you wish a comment.
Greybeard 

The full text of the petition

We the undersigned are petitioning you, as the head of Government, in our search for justice and relief from oppression in a dispute with the Fiji National Provident Fund. The dispute has widened to include the Government of Fiji which, for reasons we do not understand, is supporting the FNPF in its penalizing of innocent pensioners.

This petition contains details of our deeply felt grievances. Our worst fears were more than realized in the FNPF Transition Decree. We were acutely aware that a decree of this nature would likely be used against us. But its provisions and effect are shocking. In our view it has taken Fiji into a realm of legal extremism. It became the final move of the Government and the FNPF to deal with the problem of pensioners and their reduced payments.

It gives effect for the first time in Fiji’s history to the breaking of binding pension contracts. Previously, when changes to pension arrangements were introduced, the FNPF honoured the contracts that were in place because they were irrevocable. The FNPF has now abandoned this legally correct approach which has been endorsed by independent legal advice. There is also acknowledgement from FNPF consultants that the Fund had contractual obligations that should be met. In fact the consultants said in a report that

sufficient funds should be set aside to fulfill payments at contracted rates. They knew the FNPF could afford to pay and that it should pay.

A critical question is why the FNPF rejected this advice from consultants it trusted, who are familiar with every aspect of its operations? The FNPF has never explained this. In the interests of transparency and good governance, aggrieved pensioners are entitled to an explanation.

The consultants later tried to shift their position on contracts in a public statement. But this was not persuasive in light of their very clear references in a written report. They also added a telling disclaimer to their remarks, including those on contracts, which explained that what they had said were opinions, not intended as legal or financial advice.

The fairest way forward is for the contract question to be adjudicated by the High Court.

 

Crossing a line

The FNPF has now crossed a line by ignoring sound and authoritative advice and must be ready for the far-reaching consequences of this. Reputation, trust and credibility are everything to an institution such as the FNPF. But already, in the eyes of many, the FNPF’s image has been badly damaged because of its appalling performance over the pension controversy. Pensioners are cynically asking when it will cancel its new proposals? A newspaper correspondent captured the mood of the moment when he said assurances from the FNPF that new pension rates are fixed for life are a joke. He says an amendment to the FNPF decree can be “signed and sealed at the blink of an eye”.

 

The iniquitous Transition Decree

We request you now to consider and address the issue of the iniquitous Transition Decree. Not only does it endorse the rescinding of contracts. It also denies us our fundamental right of seeking redress for our concerns through the court system. This form of safeguard – a cornerstone of liberal democracies – is of critical importance not only to all Fijians. It is essential also for the business community and the foreign investors Fiji is endeavouring to attract to promote economic growth.

 Along with sanctity of contracts, legal rights of redress are a prerequisite for creating a healthy investment climate. The need for legal enforcement of contracts is acknowledged by your Government in the documentation for the Peoples Charter. So is the rule of law which encompasses rights of redress and appeal.

The 1997 constitution properly addresses this. It provides that every party to a civil dispute has the right to have the matter determined by a court of law, or if appropriate, by an independent and impartial tribunal. The Transition Decree completely ignores this basic legal principle.

Additionally its undemocratic provisions have already been noted and criticised overseas as Fiji tries to position itself for consultations paving the way for a return to parliamentary government.

The role of the Attorney General

The decree is also notable because it gives the Attorney General the power to put an end to the civil action already instituted by the aggrieved pensioner David Burness. According to Dr Shaista Shameem, Mr Burness’s counsel, this would represent direct interference by the Attorney General with the powers of the judiciary. He would be taking this action in a case in which he is joined – the AG is the third respondent in the Burness matter. In Dr Shameem’s view this would be evidence of abuse of power by decree. Obviously this is a very serious matter indeed.

Additionally the decree is in breach of articles of the Universal Declaration of Human Rights which Fiji has affirmed. Prime Minister, on 24^th September 2011 you personally informed the United Nations General Assembly in your annual address to that august body that ‘Fiji’s Commitment to the United Nations Charter remains steadfast’. You will know that, inter alia, the UN Charter’s purpose is to ‘reaffirm faith in fundamental human rights’ as expressed in the Universal Declaration of Human Rights. The particular fundamental rights of pensioners that are breached by the FNPF Transition Decree are: (i) the right to life, liberty and security (Article 3); (ii) the right to be free from discrimination (Article 7); (iii) the right to an effective remedy from the courts (Articles 8 and 10); (iv) right to property (Article 17); (v) right to social security (Article 22); (vi) the right to social protection (Article 23); and (vii) the right to a standard of living and social security in old age (Article 25).

The Decree is a flagrant violation of the Government’s proposed policy on the aged which would prohibit all forms of discrimination against the elderly.

It is also discriminatory in that it treats groups of pensioners differently, despite the government’s oft-stated stand against discrimination of any kind. The discrimination is compounded when it specifically hurts a weak and vulnerable minority.

Thanks to the Transition Decree their rights as citizens to have their grievances determined by the courts have been annihilated.

 A question that will never go away is why the FNPF, with Government support, has sought refuge in an unjust law, if it was so confident of the legitimacy of recent pension decisions it has made?

 

Exercise your power for the people

Prime Minister, you are head of the Government and Minister of Finance. You have greater power than any of your predecessors. We are therefore urgently asking you to exercise that power to restore to our group the rights and the entitlements that have been taken from us. You have been described as a man of the people. We are the people, mainly the poor, retired workers and some from the middle class.

We ask that you stand with us now and revoke in their entirety the Transition Decree and the substantive legislation that is to follow it. They are not worthy of the kind of Fiji your government is committed to building.

If by the time you receive this, the Burness case has been removed by the Transition Decree from the jurisdiction of the judge, we ask that a new decree be implemented to nullify that action thus ensuring that the system of justice is allowed to proceed without hindrance.

 We are entitled to expect as well that you will give full consideration to all the other FNPF issues that bear down us and continue to cause so much anger, anxiety and despair.

You demonstrated recently that your authority extends to the FNPF when you countermanded its decision not to offer assistance to flood victims. We ask that you please exercise that authority on our behalf to give us the hearing that is our right.

• This can be achieved by staging a full independent inquiry to consider all the issues, contradictions and discrepancies that surround the actions of the FNPF in its reform agenda. Many of them are touched on in this petition. The petitioners would be very happy to work with you and the FNPF in drawing up the framework and terms of reference for an inquiry. Let us together show Fiji and the world that through co-operation and compromise we can find common ground over this divisive issue.

 

Constitutional protection

The sense of wrong we feel over our treatment by the Government and the FNPF is such that we intend to seek specific constitutional protection for the rights of pensioners.

 Never again must legitimate grievances and representations by senior citizens who have served their country well be contemptuously cast aside. Our rights must be enshrined and guaranteed. If they are not the Government’s policy on the aged will be discredited and compromised. The same will apply to your aspirations for a liberal, inclusive, modern and equal society which caters for the interests of all. You cannot achieve these goals while there is discrimination against some pensioners and suppression of their rights.

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We now address in more detail serious concerns about the FNPF’s handling of the pension issue. Our basic assertion is that the Fund has failed to substantiate its case for defaulting on current pensions. The FNPF has never demonstrated that payments to the existing pensioners will make it insolvent. It has failed to exercise a duty of care.

 

A flawed approach

When you inaugurated the review process in Suva last May you made some comments which require close scrutiny. These comments were subsequently repeated by the FNPF as the basis for its claim that existing pensions should be cut.

You spoke about the “handsome” amounts paid to about 10,800 pensioners and said these were unsustainable.

Whoever provided you with that information did not conduct proper research.

The FNPF itself later corrected what you had said. It disclosed that 89 per cent, or some 9600 of the 10,800 pensioners, were receiving monthly payments below the $800 poverty line set by the FNPF.

This meant that a fundamental argument for pension reductions was plain wrong.

The vast majority were not receiving handsome payments. They were at the poverty level.

The FNPF then said there would be no reductions in payments to these elderly people already living in poverty. It would later partly break that promise when it changed its poverty line to $300. We ask why? How could an important organization like the FNPF simply walk away from a commitment it made to the needy? What kind of corporate governance was this?

 

Singled out for discrimination

The remainder of the pensioners – about 1200 – were mostly middle or working class and their payments reflect this. They were selected to bear the brunt of the reductions. This was seen by the intended victims as a clear case of discrimination. They were to be singled out for separate and detrimental treatment which would violate the foundation policies of the Government, including those in the Peoples’ Charter, and many other anti-discrimination measures.

 

Big pensions small in numbers

There is a widespread suspicion that the main target of the pensions cuts is a group of less than 50 who receive large monthly payments. It should not be forgotten that these recipients are legally entitled to their pensions which they qualified for in accordance with the law and the rules of the FNPF. If a prime aim of the FNPF changes was to act against those on big payments, then they are largely self-defeating. Members of this group are in a position to benefit from the refund option more than other pensioners.

As stated, we believe it was the payments to them that triggered the decisions which are now the subject of this petition and which will affect the poor, retired workers and middle class the most.

Where is the justice in this?

 

 More muddle and discrimination

In the convoluted process leading to the FNPF’s final announcements on its “reforms” there were further drastic changes which again exposed the muddled, erratic and capricious nature of the Fund’s decision-making. It was evident that the FNPF did not have a proper plan and was improvising.

The FNPF, without explanation, opted for a new poverty line of $300 a month. According to our estimates the FNPF’s choice of a lower poverty figure, means pensioners facing reductions have increased from 1200 to 3600. The FNPF’s earlier figures appear to be no longer relevant. A new group of pensioners who were promised exemption now face the bitter reality of a future on substantially lower incomes. This has caused turmoil and stress among them. They have been betrayed.

 

Subsidies: Pensioners paid their share

Much is made of subsidies received by pensioners from other members of the FNPF. They were made to feel guilty about this. It’s as though they had done something wrong. But the subsidy element was part of the Fund’s structure. Current pensioners themselves paid their share of subsidies without complaint before they retired. They do not wish to hear any more prejudiced, one-sided and misleading subsidy arguments directed against them.

Another strand of thought, backed up by research, figures and financials, is that the subsidy claims are untrue. Details of the case to substantiate this can be provided.

Subsidies are now ruled out by the Government, although it appears that they may play a role in the new arrangements announced by the FNPF for certain pension increases.

This too should be examined to ascertain whether subsidies apply and what this means for the Government’s ‘no subsidy’ policy. The entire question of subsidy payments nationally should also be reviewed within the context of the decision against pensioners. Is it acceptable to pay subsidies to certain groups but not to others? Is there another element of discrimination here? Similarly, is it acceptable to give incentives and concessions to some, while denying pensioners their rightful and legal payments? Another central question is whether the FNPF through some parts of its new plans, has strayed into the welfare area which should be the preserve of the Government?

 

Half a lifetime of sustainability

When the FNPF review started, a key point mentioned by you was the sustainability of the fund for 40 years. This was subsequently increased by the Fund to 45 years. As many of the review victims of the FNPF and Government have emphasised consistently this did not provide any sort of foundation for defaulting on payments to the existing pensioners. By the admission of the Fund and the Government, the FNPF could carry on for half a lifetime under the prevailing system. This gave ample time for the Fund to be reformed while meeting its contractual commitments to the current pensioners.

 With 89 per cent of the 10,800 pensioners you referred to at the May symposium receiving poverty amounts, it was at any rate inconceivable to us that the remaining 11 per cent endangered the viability of the FNPF. That has never, ever been proven.

Our conviction was reinforced by the claim of the FNPF CEO Mr Aisake Taito that the fund was acting from a position of strength. Later you also told the nation the FNPF was in a “strong financial position.” This unquestionably projected the FNPF as well able to meet its commitments, including payment of contracted pensions. That was underscored by the recommendation of the Fund consultants for arrangements to be made to continue with these pensions. (To add a further element of confusion to the picture the consultants, in December, suddenly went into reverse and announced that the FNPF could be insolvent within seven years! This came out of nowhere and was subject to a disclaimer. It is hard to take it seriously given the disclaimer and consistent and considered references to viability up to 2050/2055. But the calculations behind the new and unproven variation by the consultants should be fully examined in an official inquiry.)

 

Why the rush to break contracts?

We ask again why was there such a determination to act against existing FNPF pensioners? Was it simply to deal with those receiving the large payments? Or were other factors involved?

 Why was the FNPF, from its position of strength, in such a rush to smash contracts – with all that entails – instead of letting those in place run their course? We are a diminishing liability. Our numbers are coming down as pensioners pass on. This natural attrition is a financial benefit to the FNPF. There is a substantial benefit also to the FNPF when a pensioner dies early.

 All of us will be long gone before 40 or 45 years has elapsed. Our plea is for the FNPF to leave us alone in our final years, without inflicting on us the disruption and stress caused by savage reductions in income for citizens who will find it difficult to re-enter the workforce to make up for their loss. Our retirements were planned on the basis of contracted pensions. The Government and the FNPF have without justification cut away the foundations of the last phase of our lives.

 

Life expectancy questions

Life expectancy estimates are vital for future pension projections. How long people will live is central to viability of pension schemes. It has never been clear to us which statistics the FNPF used in assessing the sustainability of the Fund. It was suggested by the FNPF consultants at one point that Australian figures formed part of the Fund’s calculations. If this is so they would be completely inappropriate. In November a Fiji health system review proclaimed that local life expectancy had declined from 72.9 years to 67.8 years. These findings would have major significance for the FNPF’s pension planning. But were they used? We believe the FNPF has a responsibility to explain the life expectancy statistics it used for its reform programme.

 

 

A broken pledge

In a public statement on August 6 last year, the FNPF pledged that proposed changes would be phased over a five year period. It broke that promise. There is no phase-in period of five years. The FNPF CEO has been unable to explain why the fund reneged on this. Its action was a further blow to the FNPF’s already battered image and credibility.

 

The cruelty of the Budget

Your Budget speech on November 25 last year contained the broad details of the FNPF pension reductions. In our view it was not appropriate for that announcement to be made in the budget. The Government does not own the FNPF. We respectfully suggest the announcement should have come from the FNPF.

The budget address contained a declaration full of cruel irony and staggering insensitivity for the FNPF’s victims. You followed your comments about the FNPF changes with a revelation that civil service pensioners, former members of the disciplined force, war veterans, retired judges, former prime ministers, ministers and members of Parliament, would receive a 20 per cent increase in their entitlements. A 20 per cent increase!

So while some pensioners would be having their payments cut by about half, others would be the beneficiaries of a large increase. No details were given of how many would get the substantially bigger amounts, but we assume it will be several thousand.

We assert Prime Minister that this too is discriminatory. A significant number of FNPF members would get less; civil service pensioners would receive more. Why were the two groups treated so differently?

Some pensioners also saw that while they were left out in the cold many taxpayers received a substantial bonus through a reduction in income taxes. It was further evidence of what can only be seen as a campaign directed against certain hapless pensioners.

 

Is the Government pension increase sustainable?

It is relevant to inquire whether a full actuarial study was conducted on the sustainability of the major increases for Government pensioners? How are they to be paid? What will they cost? Information about this is of crucial interest to the public which in the end pays the bill. The disadvantaged FNPF pensioners too will help to meet this increase for the civil service pensioners through value added tax and other government fees and charges. There is further serious injustice in this.

 The Ministry of Finance Economic and Fiscal Update of November 12, 2011, lists State guarantees and contingent liabilities. Included in this is an amount of $973 million for the FNPF. What does this relate to? Is it for Government pension payments? If it is why is it listed as a state guaranteed contingent liability? Is it connected to a Government guarantee laid out in Section 10 of the FNPF Act Cap 219? Could we please ask what the position of the Government is in terms of honouring the guarantee to meet contracted payments to existing pensioners?

In an earlier fiscal update there was a reference to FNPF members’ contributions accounting for nearly 75 per cent of total Government contingent liabilities. What does this mean?

For pensioners and the public at large there are questions here that require clarification, particularly when the FNPF is so prominently in the news.

 

Misrepresentation

The FNPF CEO, Mr Taito, thinks we have been trying to stop the reforms. That is patently untrue. We accept that changes need to be made and have said this often. But we are completely and passionately opposed to the decision to cut certain current pensions for the many reasons outlined in this petition.

 

Propaganda attack by FNPF

In its propaganda attack against its own members, the FNPF sank to a new low in July last year. Someone in the Fund deliberately released confidential information to a newspaper about particular pension accounts. The information was published. This episode was unprecedented in the annals of the FNPF and other corporate bodies. It was an indication of the extent to which the FNPF was prepared to go in its determination to attain its ends in the pension dispute. Pensioners protested about what was regarded as a scandalous infringement of corporate ethics and values by the FNPF. At least one pensioner called for the FNPF to investigate the security breach and give a public assurance that members’ account details from that point on would be protected, secure and forever confidential. There was no response from the FNPF.

Petitioners would still like a proper inquiry into this incident within the context of good governance and accountability. They also want the FNPF to adopt a “whistleblower” policy protecting those who name FNPF employees guilty of leaking confidential information such as pension account details or who disclose instances of unethical, and dubious practice.

 

Refunds will become bitter pills

In its new policy, the FNPF is offering refunds of the original amounts pensioners had in their accounts. This appears to be another breach of commitment by the FNPF because a refund is not a pension. Our view is that the FNPF has adopted this option as some sort of “sweetener” or to soften the impact of what the Fund has done. We understand that a good number of pensioners are taking refunds. Unfortunately this sweetener will become a bitter pill for many who accept it. When the money is spent, which in numerous instances is likely to be sooner rather than later, what will happen to the recipients? Destitution will stare them in the face. There will be more claimants for social welfare payments. What a tragic outcome for the FNPF “reform” programme. What a social and human disaster for the pensioners concerned.

 

Many dimensions to the hurt

There are numerous dimensions – social, material, physical and psychological – to the hurt visited on the signatories by the current situation. Think of the mental torment and the impact on health related to uncertainty and anxiety which has hovered for many months. It has been described as a sword hanging over the pensioners who were expecting to become victims.

One lady of 70 experiences such severe fits of depression that she has spoken of not wishing to live.

A manager was made redundant before he retired. For 14 months he and his wife lived off their savings. “When I got to 55 it was a big relief. We felt safe and secure,” he says. “But later, along with other pensioners we went through hell waiting and wondering. The mental anguish is awful really. To top it all, we are being put on this guilt trip because we received pensions at the higher rate. Never mind that this is what we were offered in accordance with the law.”

This same pensioner went into a state of despair at the prospect of being unable to service a home improvement loan negotiated on the basis of his pension. His predicament has not been resolved.

Here is an extract from an email: “Like us all I have too have been very stressed at the thought of my pension being reduced. It was barely enough to live on now let alone reduction and inflation….I have been doing some work for aid agencies…..but sadly am forced to look at full time employment again.”

A pensioner and his wife (also a pensioner) went for their annual media check-ups. His wife had not been sleeping well for the past few months while, for the first time in his life, he was experiencing consistently high blood pressure. He says: “Talking this through with our doctors, we have all concluded that the outcome is a result of pressure, stress and worry about the way we are being treated by the FNPF and the threat to reduce our pensions. Maybe this is what they want; for us all to suffer and thus reduce our numbers.”

A pensioner from the western division told a friend of her worries about meeting her financial commitments, adding that for the first time she was having heart palpitations.

Another pensioner, suffering from a terminal illness, died this month. The FNPF cast a shadow over the final period of his life. He was haunted by anxiety about the possibility of having to sell his house. He joined in discussions with other pensioners about their predicament and made a special effort to attend public consultations.

One of those who spoke out strongly at an FNPF meeting cares for her dependent mother, while funding overseas education for a daughter. She is already trying to come to terms with the likelihood of becoming a burden on her children.

An eminent professional person said bitterly that he had his retirement mapped out based on his pension. Now he is looking at seeking employment again.

There are many more stories among senior citizens of stress and deep anxiety, psychological pressure, broken dreams and disturbed lives related to the FNPF’s determination to act against existing pensioners from its position of strength.

Retirement was not meant to be like this. This is no way for any pension fund or society to treat elderly people.

We look to you Prime Minister to reverse what has been inflicted on us. We ask you to do this in the name of social justice, compassion, good governance, inclusion and respect for those in the last season of their time on earth. 

Signed by pensioners and supporters: We ask that you click on the COMMENTS Section  at the top of the page, and add your name and if you wish your comments to this petition, it is as easy as that.