29. Bainimarama trashes FNPF contracts (2011) (Cens)

[Blogs, 26 November 2011]

Key words: Bainimarama Government, Burness/Shameem case, coup collaborators, Fiji National
Provident Fund (FNPF), Fijian Holdings Limited (FHL), FNPF Board, FNPF
Investments, Mercer Actuarial study, Pacific Scoop,, Promontory Report, Shameem, Shaista,
Sharma, Davenesh, workers’ representatives.
he illegal Military Regime has announced its plans to trash the contracts that FNPF had signed
with pensioners.Existing pensioners will be given a choice of receiving back their final balance
when they retired (in nominal dollars, of course), or go on to the new single pension rates
which will range from 8.7% if you are 55 to 12.3% for those 70 years old and over.
This will give existing pensioners a “Hobson’s choice” or more correctly, the “Morton’s Fork”
between two options, both of which will imply an effective reduction to their existing contracted
entitlements. Or pensioners can go ahead with the Burness/Shameem legal case (supposed to be
heard in February 2012). But of course, there may yet be another Military Decree stopping any
challenges in court.
FNPF pensioners might want to clear their cobwebs on the following five statements, and
especially Statement 3:

1. Existing FNPF pensions cannot be legally reduced under the FNPF Act.
2. The FNPF Act does not allow FNPF to vary the pension rates differentially for allegedly high and low
   income pensioners.
3. FNPF has the financial capacity to pay existing pensions at their current rates for another 18 years, if the Buffer
   Fund had been properly credited with interest payments from 1975 to the present, AND if the provisions of the
   FNPF Act had been strictly followed by successive Boards.
4. Successive Fiji governments, including the current illegal Military Regime, have been directly and solely responsible
   for whatever mess exists at FNPF today
5. The only proper way to change the FNPF Act is for an Independent Expert Commission of Inquiry into FNPF
   to make recommendations which should only be considered by a future elected Government.
   Background
   The Fiji National Provident Fund is not a “government owned public enterprise” belonging to the
   Fiji public and tax-payers, but it belongs only to the workers whose contributions have funded it.
   Historically, however, FNPF has been totally controlled by successive governments, from its
   inception till today.
   The FNPF was originally intended to be a compulsory savings scheme for workers, with all the
   savings and interest thereon to be returned to the worker as a lump sum on retirement (read the
   Legislative Council debates in 1968). The system was then lawfully changed by Parliament in 1975 to
   introduce a pension annuity option, which was set at the high rate of 25% for single pensions, to
   encourage retirees to take the pension rather than the lump sum. Despite that high rate of pension,
   the pension uptake was way less than 15%. Then when the uptake proportion did begin to rise (late
   80s and early 90s), an ILO study (1993) advised that the annuity rate should be brought down
   gradually to 10%. But the 1998 Parliament decided to bring the pension rate down to 15%,
   gradually over ten years.
   Even if actuarially unwise, this was a lawful decision made by Parliament, thereby legally under-writing the contracts
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which all pensioners have entered into. To break these contracts is to make a mockery of justice, law and order,
constitutionality, and the sacred powers and responsibilities of Parliament, and the people it represents.
But why is it that the ILO projection that in the long term some 35% of retirees would take the
pension option, has been proven inaccurate?
The pensioners’ gamble: the “risk of dying early”
Why is it that while actuaries have concluded that the annuities between 15% to 25% have been
excellent value, the historical reality has been that the majority of retirees (more than 70%) have not
been taking up the “good” pension offers? Of course, the return was high. But there is the risk of
dying early and losing all thereafter.
This is a tough choice even for educated people, and even at the current allegedly high 15%
pension rate. I suspect that many of the retirees who took the pension option would be financially
well-off and able to handle the risk of dying early.
Don’t forget that while some pensioners have found the annuity excellent value (which FNPF
harps on about), some retirees have also died before they “recovered their life savings”: their families
have lost out (no comment from FNPF on these losers).
Recent developments
The recent Promontory Report, based on the actuarial study by Mercer, and examining the recent
poor investment and income record of FNPF, recommended the further reduction of the single
pension rate to 9% but only for future pensions (not existing pensions). This Promontory Report
has been very selectively used by the FNPF Board and Management to justify their planned changes
to existing pensions.
At one stage FNPF Management stated that all annuity rates (existing and future) would be
reduced to around 9%. Then they backtracked to some nebulous proposal that they would reduce
the existing pensions only of those above some “poverty line” (to be decided by themselves).
Coconut Wireless now suggests they have dreamed up another “scheme” to give the illusion of
“choice” to existing pensioners. Wait for the 2012 Budget on Friday 25 November 2011, to reveal all
(and more). But pensioners must not forget that existing contracts of pensioners are legally valid and cannot be
forcibly changed, by offering alleged “choices” to pensioners.
FNPF offered legal contracts approved by Fiji Parliament
The undisputed facts are:
(a) The current pensions were all freely offered by FNPF whose Boards have always been totally
controlled by Government: all FNPF Board members have been appointed by Government
(while Employers’ Associations and unions may nominate representatives, the final choice and
appointments are made by the Minister); and the Chairman of the Board has always been
appointed by Government.
(b) All decisions on annuity rates have been made by the elected Parliament: the FNPF Board can
only make recommendations, not decisions.
FNPF claimed that Section 63 of the FNPF Act which allows the FNPF Board to “prescribe the
amount, frequency of payment and duration of any annuity payable under the provisions of
paragraph (b) of section 64” as may be” gives the Board an authority to reduce existing pensions.
This was a completely wrong interpretation, as that section simply refers to Section 64 (b) which
gives powers only over the method of dispensing the annuity already decided upon by parliament as a
percentage of whatever balance the pensioner leaves with the Fund.
Once that percentage has been fixed (and the OP-9 form specifies both the percentage and the
corresponding dollar amount), the amount of the total annual annuity in dollars and cents cannot be
changed- as that would be changing the percentage of the final balance being given to the pensioner
in a legal contract on the OP-9 form.

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Nowhere in the contract (the 9-OP form) is there any clause which warns the pensioners that
their pension rate may be changed in the future by the FNPF Board at its discretion. Any attempt by
the FNPF Board to vary the annuity rate, already offered to and accepted by pensioners, is therefore
totally contrary to the FNPF Act and in breach of the laws on contracts.
FNPF has the full capacity to enter into contracts.
Article 4 of the FNPF Act states that the FNPF Board shall be a body corporate and shall, by the name of
“The Fiji National Provident Fund Board”, have perpetual succession and a common seal …. The Board may sue and
be sued in its corporate name and may enter into contracts.
A legal corporate body (FNPF) made a clear offer (on Form 9-OP) to the retirees that should
they choose the pension option (whether single, joint or combination) and leave all of some of their
savings with the FNPF, they would receive in return an annuity (expressed explicitly in dollars and as
a fixed percentage of their final balance) until they (or their nominated partner) died.
Legally, in a civilized world without arbitrary Military Decrees, the FNPF (and the Board
Members) may be sued if they break these contracts.
If FNPF Board Members cannot be sued in Fiji, it should be investigated if those with foreign
residency, can be sued in their home countries.
Promontory’s proper advice under contract law
The Promontory Report stated (paragraph 25):
“There have been some suggestions that existing pensions should be withdrawn, capped or
reset at a discount. … Any retrospective adjustment of existing pension benefits would be
difficult under contract law…… While an adjustment to existing pensions remains a
possibility it is not further considered in this paper”.
Promontory based the rest of their analysis and recommendations on FNPF not breaking its
contracts with existing pensioners. The Promontory Report clearly separated the problem of funding
existing pensioners, from the problem of funding future pensioners, whose annuity rate may be
legally reduced by any lawful government.
FNPF cannot vary the pension rates differentially
The FNPF Board previously announced that they will not reduce the existing pensions of some 89%
of pensioners whose pensions are “below the poverty line”, but they will reduce those of the other
11% earning higher pensions. However, Section 12 B of the FNPF Act specifically requires the
Board “to act impartially towards beneficiaries and between different classes of beneficiaries.” Forget poverty lines,
etc. etc.
FNPF has the financial capacity to pay existing pensions
There are several legitimate sources to fund existing pensions.
Source 1: The Pension Buffer Fund
This was expressly set up in 1975 to fund pensions, with all members injecting 2 cents in the dollar
between 1975 and 1998, when the injection was stopped by Parliament. The Buffer Fund was then
absorbed into the General Reserve in 2000.
However the account was still maintained, and continued to receive all the final balances of
members who chose the pension option. But successive FNPF Boards wrongly neglected to pay interest on this
Buffer Fund although the Fund earned income on these funds.
My calculations show that the properly credited Buffer Fund would in 2010 have amounted to
some $870 millions (or a bit less given that the interest income has to be spread over all the
shareholders’ funds), which would cover around 18 years of the current annual pensions payout of
around $47 million (and probably more as high earning pensioners gradually die off).
It is false of the FNPF to claim that they do not have the financial provisions to pay the existing

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pensions at the existing rates.
Source 2: The savings from pensioners who die early
While FNPF has given numerous tables alleging cross-subsidization of existing pensioners by current
contributors, it has never acknowledged nor given any data whatsoever on the numbers of pensioners
who have died before they could “get back their money”.
These “savings for FNPF from those who die early” partly cover the costs of those annuities of
pensioners who live on (allegedly for “too long”).
Source 3: The General Reserve
The General Reserve has also been contributed to by pensioners and has always been expected by
the actuaries to be the final guarantor of pensions.
Ultimate Source 4: The Fiji Government
The FNPF Board is authorized under Section 10 of the FNPF Act:
“If the Fund is, at any time, unable to pay any sum which is required to be paid under the provisions of this Act,
the sum required shall be advanced to the Fund by the Government and the Fund shall, as soon as practicable,
repay to the Government the sums so advanced”
The FNPF Board can legitimately make a case to the “Government of the Day” that they should pay
any shortfall (which is not required as I state above).
It has been past governments who have enjoyed easy finance at relatively lower interest rates
than charged by the private sector, and they moreover are responsible for whatever financial mess
the FNPF currently finds itself in (see below).
FNPF Boards’ Continuing Breach of Section 8 of FNPF Act
Section 8 (FNPF Act) requires that “the Board shall, having considered the recommendation of the General
Manager”, declare a rate of a rate of interest to be paid to members’ credit, not less than 2 1/2 per
cent per annum provided that “no rate of interest exceeding 2 1/2 per cent per annum shall be so declared, unless,
in the opinion of the Board, the ability of the Fund to meet all payments required to be paid under this Act is not
endangered by the declaration of such rate”.
Yet year after year, the FNPF Board has declared a rate of interest higher than 2 1⁄2 percent.
Even this year (2011) is has credited more than 5% to Members’ funds. Yet the current FNPF Board
and Management allege that existing pension rates are unsustainable, and have been known to be
unsustainable for more than a decade.
The FNPF Board has been in breach of the FNPF Act by declaring rates of interest which are in
excess of 2 1⁄2 percent and at the same time claiming that the Fund is unsustainable. While not doing
what it is specifically required to do by the FNPF Act, the FNPF Board is attempting to do what is
nowhere authorized in the FNPF Act, namely to reduce existing annuities contracted to existing
pensioners or their beneficiaries.
Governance issue: refusal to make public all reports and FNPF data
Under the provisions of the Act, the FNPF and all its assets belongs to the current contributors and
pensioners. The FNPF Board are only trustees, and together with the FNPF Management, are
supposed to be accountable and transparent to the members.
Yet, for several years now, both the FNPF Board (current and preceding ones) and Management
(current and preceding ones) have adamantly refused to make available to the beneficiaries of the
Fund, all the various Reports and relevant data on the sustainability of the FNPF. They make a
mockery of the “Core Values” which FNPF proudly and falsely advertises on its website:

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Accountability: Being answerable and having the courage and honesty to take ownership of our actions; Fairness:
Treating everyone in an equitable and nondiscriminatory manner; Integrity: Being honest and fair to all our
stakeholders; Excellence: Always maintaining highest standards.
The Board Members and FNPF management ought to be taken to task for their abject failure to
abide by these “Core Values”. The latest data on their “Key Indicators” webpage ends with 2007
data- already four years out of date. How pathetic.
Publicly available consultants’ Reports have serious gaps in data, and none of them give the
details of actuarial projections based on the life expectancies; therefore one has no idea if their
assumptions and analyses are correct. Some of their assumptions about future life expectancies may
even be wrong.
Possible errors in actuarial assumptions
The Promontory Report’s recommendations were based on the Mercer actuarial study. The Mercer
presentation at the symposia organized by FNPF stated that the mortality rates they used were
derived from “the 2008 Fijian population life tables prepared by the World Health Organization” (no
problem) but they used “mortality improvement based on experience of the Australian population over 25 years as
reported in the current Australian Life Tables (2005-07).”
Demographers will know that projections of improvements in Australian mortality cannot be
used to predict future trends in Fiji’s mortality. Australia’s life expectancy is rising, their people are
living longer, and drawing pensions for longer. If the Australian patterns of mortality improvement
did apply to Fiji, then Fiji’s people would also be living longer, and the sustainability of FNPF
pensions may indeed require relatively lower pension or annuity rates for Fiji.
However, if Fiji’s mortality falls or stagnates, then Fiji’s pensioners will die earlier than predicted
by Australian trends, and Fiji’s pension annuity rates would correspondingly need to be relatively
higher. All indications are that Fiji’s mortality will not fall like Australia’s and Fiji’s life expectancies
will not rise like Australia’s (detailed explanation of this is excluded here). Similar errors seem to have
been made by the ILO actuarial projections.
Government’s excessive role in FNPF
Note that the Government-controlled FNPF Board has been the ultimate decision-maker on:
(i) all large lending decisions (how much and interest rates) including loans to Government.
(ii) the interest rate to be credited annually to the FNPF Members.
(iii) the three historical decisions approved by Parliament: the original 1975 decision to pay 25% annuity on single
pensions; the 1998 decisions to reduce pensions gradually from 25% to 15%, and the stopping of contributions to
the Buffer Fund.
(iv) all large investment decisions, including the questionable price paid for the majority shares in ATH which
independent assessors thought may have been more than $100 million or probably up to $150 million in excess;
and the cost blowout at Natadola and Momi.
Even the Promontory Report criticized the government’s excessive and negative influence on the
FNPF in Paragraph 90:
“In discussion with stakeholders… appointments have been seen as highly politicized and blamed for some of the
poorer investment outcomes. A common theme was that Government had interfered too much with operations and
decision-making of the Fund.
Paragraph 91
“Policy Principle: the FNPF Board should comprise a majority of independent members.
The Board’s primary fiduciary responsibility is to act first and foremost in the interests of

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the fund members, not representative groups, Government or even the wider interests of
Fiji.”
Promontory advised that any new legislation needed to spell this out explicitly and the law be
strengthened in this regard.
It can be seen therefore, even from a Report that was commissioned by the FNPF itself, that
FNPF contributors and pensioners have had no say whatsoever in any of FNPF Board decisions and
that Government has had over-riding influence.
Poor investment decisions by FNPF Boards
A very important question for investigation is whether successive FNPF Boards have been giving
loans to the Fiji Government at relatively low rates which the governments would not have received
from the commercial banks, locally or internationally.
Would a truly independent Board and FNPF, free to invest internationally and locally, have been
able to receive higher interest rates from the Fiji Government which could have resulted in higher
returns to Members and higher sustainable annuities to pensioners?
Is the current liquidity crisis of FNPF due to bad Board decisions made on the large investments
at Natadola, Momi, GPH, FSC, Tappoo City etc. which are not returning the loans on time? Would
an independent FNPF Board have made the large loans to FSC which has technically been insolvent
for a couple of years, and whose problems have been worsened because of the Regime’s refusal to
hold elections in 2009 (hence EU refusal to grant 300 million dollars for sugar industry restructure?
How much has FNPF lost in income and capital value because of Fiji Government’s decisions
through the RBF to bring back FNPF investments from abroad?
The Military Coups’ impact on FNPF
To what extent is the current FNPF crisis due to lack of investment, lack of economic growth, lack
of growth in employment and incomes and FNPF contributions, due to the continuing political
uncertainties and the results of the 2006 Military coup and the 2009 purported abrogation of the
1997 Constitution?
To what extent is the high rate of inflation which is eroding all pensions and funds in the
Pension Fund caused by the massive deficit financing by the Government (using easy funds obtained
from the FNPF), and lack of economic growth?
These are all questions which would need to be examined in detail with full facts and figures,
and all available reports, made available to an expert Commission of inquiry, and to Fund Members
and Owners.
Amendments to FNPF Act Only through an elected Parliament
All changes to the Fiji National Provident Fund Act have historically been implemented through
elected parliaments, with full responsibility falling on the people’s own elected representatives,
whether the decisions were correct or incorrect. This is the only way in which such drastic changes
should be made to a legislation that will affect the lifetime savings and pensions of hundreds of
thousands of waged and salaried persons in Fiji, and impact on the wider economy.
There should first be an Independent Commission of Inquiry which would examine all the
financial, economic, actuarial expert analyses and reports, consider the past history (including key
decisions, successes, failures, errors in judgment by FNPF Managements and Boards etc. ) and give
reasoned and balanced advice on the future path for the Fiji National Provident Fund.
If the Independent Commission finds that the actuarial studies, properly revised to Fund
members satisfaction, do indicate the need for reviews of the pension fund, then that would no
doubt go ahead, but only with social approval and social consensus, through an elected Parliament.
All calls for greater accountability of FNPF Board, have been ignored by this Military Regime,
giving the lie to their Charter’s hollow promises of accountability and transparency.
Continuing media censorship, takes away our basic human rights of freedom of expression
including our rights to discuss publicly our just grievances. Pensioners’ legitimate interests are just
one casualty of this Military Regime.

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The breaking of contracts with pensioners will be merely another example of the many legal and
social contracts this illegal Military Regime has broken, and continues to break, with impunity.
The defense of pensioners’ rights are part of the bigger challenge to defend all our human rights
in this country. These challenges cannot be separated. To separate them is to basically state that one
wants our own rights to be safeguarded, while others’ basic human rights are others’ problems.

30. FNPF Draft Decree 2011: taking control (2011) (Cens)

[Blogs, 2 December 2011]

Key words: Bainimarama Government, coup collaborators, Fiji National Provident Fund (FNPF),

FNPF Board, FNPF Transition Decree 2011, workers’ representatives
he illegal Military Regime is now passing around a Draft FNPF 2011 Decree, for comments
from selected people. The Draft Decree has references to “codes of conduct” “transparency”
“duty” to FNPF Members, duty to become a whistle-blower who will be protected, etc. But
quietly put in all the sections to do with the real control of the money flows, are clauses which ensure
that the “Government of the Day” and FNPF Board can do virtually anything they want to, with the
life savings of the workers of Fiji. The 7 member Board will be all appointed by the Minister. There
will be no direct representatives of FNPF contributors, or FNPF pensioners or employees or
employers. The Board will not be Trustees but shall “own” all the assets of the Fund and be free to
do whatever they want, establish whatever policies and procedures they want. Sorry, that’s not strictly
correct: the Board will have to implement whatever is required through “a written law” (yet to be
written). By whom, did you ask? Ha ha ha.
The annuity (pension rate) to be paid from the Retirement Income Fund will be reduced to
8.7% single pension rate if you retire at 55 but the rate will slowly rise if you retire later- going up to
12.3% if you retire at 70. The Board will also be given the powers to vary the annuity as and when
they see fit (i.e. no need for elected Parliaments), with frequent advice from actuarial experts (who
are how so fortunately guaranteed regular incomes from the FNPF).
If the “Retirement Fund” makes a “surplus” (why on earth should it?) then the surplus goes to
the General Fund, where the Board can dispose of any amount, as they wish. Stuck somewhere is
also a statement that the Board must ensure equity not just between different classes of fund
contributors, but also between annuity receivers (i.e. pensioners) and current contributors. i.e. this is
the clause that will be used to reduce existing pensions, no doubt once the new Board has all the new
“powers”.
Promontory had recommended that there be a separate Retirement Income Fund solely to pay
for the annuities, and the General Fund which would manage the workers savings as they came in.
This made sense for the future. But the Draft FNPF 2011 decree also recommends (Clauses 86, 87
and 88) the setting up of a strange undefined “Supplementary Fund”.
Read closely the Draft Decree about how this “Supplementary Fund” is to be set up (where the
money is to come from), and how the funds are to be used, including, a reference to “a written law”
(yet to be written). Pensioner might ask themselves: if this Military Regime can trash already existing contracts
between the elected Fiji Parliament and pensioners, why won’t it trash any future contract with future pensioners,
allegedly governed by the Draft FNPF 2011 Decree?Indeed, who can trust this Military Regime to keep any
contract?
Quiz: will the FNPF 2011 Decree change anything at all at FNPF?
The current FNPF Board and Management has been appointed by the same Military Regime that is
drafting this FNPF decree. Answer “Yes” or “No” to the following questions: Anyone answering
“Don’t know” to any of these questions, go back and bury your head in the sand. Don’t bother
answering question 21.

1. Is the primary concern of the current FNPF Board and Management your interests?
2. Is the current FNPF management giving you all the relevant data and Reports you need to make your own
   assessments?
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3. Will the FNPF Board and Management give you the Consultants’ Original Draft Legislation on the FNPF
   2011 Decree, so you can compare and ascertain what Khaiyum and his lawyer mates have made changes to the
   original draft?
4. Have Bainimarama and Khaiyum been really up-front and honest in giving you all the reports on the misuse of
   FNPF funds by the FNPF Board members?
5. Have the FNPF Management got expert legal advice that all that pensioners have with FNPF is an
   “agreement”, not a “contract”?
6. Has the Reserve Bank of Fiji been successful at restraining the irresponsible lending and investments by the
   FNPF, and looking after the legitimate interests of FNPF members such as its foreign investments?
7. Is the Reserve Bank going to recommend that the FNPF Board has majority members directly elected by FNPF
   contributors and pensioners?
8. Has this FNPF restructuring anything to do with the alleged reasons for the coup: removing corruption, bringing
   racial equality, one man-one vote?
9. Have the FNPF contributors and pensioners asked Bainimarama and Khaiyum to do all this drastic
   restructuring with their pension fund?
10. Are Bainimarama and Khaiyum restructuring FNPF because they care about workers and pensioners?
11. Is the FNPF a welfare organization where those receiving less than $100 per month will be “topped up” at the
    expense of the pensioners whose pensions have been cut?
12. Is the return of 8.7% on your lifetime savings a FANTASTIC RETURN, with inflation running at more
    than 5%, and likely to rise even more with the irresponsible increased government expenditures on salaries, without
    any real growth of the economy?
13. Will the jovial illegal President of Fiji sign the FNPF 2011 Decree?
14. Will the jovial illegal Presidents’ mates continue to happily socialize with him at the Defence Club and Fiji Golf
    Club, and parties organized by embassies, international and CROP organizations, universities, NGOs, etc. etc.?
15. Can you question anyone in power about your FNPF pensions and Fund? Illegal President? Illegal Prime
    Minister? Illegal Attorney General?
16. Can you freely discuss the Draft FNPF Decree publicly in Fiji?
17. Does the Military Regime really believe in the Charter principles of accountability and transparency? (What? You
    have not read the Charter yet? Oh dear.)
18. Does the Draft FNPF Decree indicate that the Bainimarama/Khaiyum Regime will give up control of Fiji,
    FNPF, etc. after the free and fair one-man-one-vote “elections” in 2014? (ha ha ha).
19. Will Fiji workers now have to work much harder in order to save for their retirement? If you don’t know this
    answer, read George Orwell’s Animal Farm- available free on the internet- and note especially
    what Napoleon, Squealer, and Raven did after they took over the farm allegedly for the welfare

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of the farm animals. Who do Napoleon, Squealer and Raven remind you of? Oh dear, what a
tough question.

20. Will Fiji’s smart lawyers and accountants and even former FNPF management rush up to analyse the Draft
    FNPF Decree so as to enlighten the ignorant FNPF contributors and pensioners?
21. Is it “time out” for those who have been bashing their heads against the wall for the last decade, with little support
    from FNPF members who slumbered (or cowered in fear)?
22. FNPF Transition Decree: last nail in FNPF coffin (2011) (Cens)

[Blogs, 3 December 2011]

Key words: Bainimarama Government, coup collaborators, Fiji National Provident Fund (FNPF),

FNPF Board, FNPF Transition Decree 2011, workers’ representatives
he illegal President has signed the unlawful “Fiji National Provident Fund Transition Decree”
which trashes lawful contracts between FNPF and pensioners, takes away their basic human
rights to personal property, and removes their basic human right to take their just FNPF
grievances to court, all the while shamelessly claiming that no one’s human rights are adversely
affected by this Decree.
The FNPF Transition Decree claims in Part 2, that “the principal object of this Part is to ensure that the
arrangements for the provision of annuities by the Board are sustainable, non-discriminatory, and do not involve cross
subsidy of one group (pensioners and annuitants) by another (FNPF members).”
Such phrases are also in the draft FNPF Act, and the drafters have no idea (or they don’t care)
how internally inconsistent all these phrases are even within their Decrees (elaborated below). The
Decree makes a pathetic attempt to justify itself by referring to IMF, World Bank, ILO and “actuarial
experts” who we know all recommended reductions of future annuities, but none recommended the
breaking of lawful contracts and basic human rights to property nor of denying recourse to justice
for existing pensioners.
These agencies need to be publicly challenged as to whether they lend their support to this
unlawful Decree which undermines laws of contracts and fundamental human rights of pensioners in
Fiji. The Decree has five Parts:
Part 2: Terminates the current pensioners’ claims
Part 3: Share investment scheme (not commented on here)
Part 4: Protections (what a farce).
Part 5: Regulations (not commented here)
Part 2: Trashing lawful contracts
Despite the FNPF CEO’s strange claim that pensioners do not have a “contract” but an
“agreement”, the facts all suggest that pensioners do have lawful contracts approved by the elected
Fiji Parliament: I remind again, Article 4 of the FNPF Act states that the FNPF Board shall be a body
corporate and shall, by the name of “The Fiji National Provident Fund Board”, have perpetual succession and a
common seal …. The Board may sue and be sued in its corporate name and may enter into contracts.
(a) the contracts were freely offered by a corporate body, FNPF, on the OP-9 form all of which were
signed by pensioners and accepted by FNPF.
(b) On Form 9-OP, the FNPF informed the retiree that if he chooses to take the pension options, he
will receive exactly this or that annuity (annual sum of money in dollars, and exactly this or that
precise percentage of his final balance) payable for his lifetime (single pension) and the lifetime of his
last surviving partner (in the case of the lower double pension). The FNPF warned pensioners “Once
you have made your choice it is final and cannot afterwards be changed or revoked.” The pensioners
had entered a legal contract which could not be changed by them.
But the FNPF and the Military Regime clearly think that they can do whatever they want.
Part 4: Protections: What protections?
Article 17 of the Universal Declaration of Human Rights (UDHR) says “Everyone has the right to own
property” and “no one shall be arbitrarily deprived of his property”.
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Have a laugh if you thought that Part 4 of the Transitional Decree titled “Protections” was about
protecting you, the pensioners and your property. Do you really believe Subsection 11 (2) of the
Transition Decree which brazenly claims “the relevant provisions are not to be taken to provide for a
deprivation of property of anyone”. What a farce. By all relevant criteria, the current pensioners’
FNPF annuities are real financial property, guaranteed by a lawful contract guaranteed by elected Fiji
parliaments.
Yet for virtually everyone currently receiving more than $300 per month, their entitlements are
going to be drastically reduced – by between 30% and 54% of their lawful property. i.e. The total loss
to existing pensioners, in present value terms, will amount to more than $150 to $200 millions in
aggregate (I roughly estimate).
Given that Australia and NZ do not recognize the Military Regime or its unlawful decrees,
FNPF pensioners who are being adversely harmed might think about suing FNPF in Australia or NZ
where FNPF has investments.
Part 4 “Protections”: Denying Human Rights of Access to Justice
Clause 11 of the Regime’s Transition Decree shamelessly states the following, straight out of Animal
Farm: (1) “The relevant provisions are not to be taken to be inconsistent with a human right or a
similar right of any person”. i.e. the Military Decree assures you, in legal gobble-de-gook, that your
human rights are not being harmed. What a farce.
Article 8 of the Universal Declaration of Human Rights (UDHR) states “Everyone has the right to an effective
remedy by the competent national tribunals for acts violating the fundamental rights granted him by the constitution or
by law”.
Article 10 of the UDHR “Everyone is entitled in full equality to a fair and public hearing by an independent and
impartial tribunal, in the determination of his rights and obligations…”.
But Subsection (3) of Part 4 of the Regime’s Transition Decree states: “No court, tribunal, or other
adjudicating body has jurisdiction or power to accept, hear, determine or in any other way entertain any challenge by any
person, or to grant any remedy or relief to any person in respect of” (a and b) the validity of the Decree and (c) “any loss
or damage suffered by any person…” as a result of the provisions in the Decree.
(4) states if there is any relevant claim before any court, “the presiding judicial officer, without hearing or in any
way determining the proceeding of the application, shall immediately transfer the application to the Chief Registrar of
the High Court for the termination of the proceeding or the application…” and “a certificate to that effect shall be issued
by the Chief Registrar of the High Court”.
(5) states if any relevant proceeding has already been started but not determined, that proceeding is also terminated.
(6) in case some brave judge thinks otherwise, the Transition Decree sternly warns that any court that
is currently hearing such a proceeding, “must, on application by the Attorney-General … issue a certificate to
the effect that the proceedings …. have been wholly terminated..”.
Under (7) such terminating certificates cannot be challenged in court.
Bottom line: the judiciary will not be allowed to hear your case, even though it involves a lawful legal
contract entered into between FNPF and pensioners, backed by elected Fiji Parliaments, your basic
human right to personal property, and your human right to go to court with your just grievances.
Tough luck for the Burness/Shameem case, eh? The very fact that this Military Decree stops all legal
challenges is clear evidence that the Regime knows that the FNPF case will not stand up in court.
Why else would they have Part 4 in this Decree, alleging “Protections” – yeah, protection of the
Military Regime against legal action. So much for the separation of the judiciary from the State.
Part 2 of Decree: False claim Number 1

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Part 2 of the FNPF Transition Decree claims that the lumps sums the pensioners left in the Fund
and the investment income thereupon (allegedly amounting to $310 million), cannot meet the present
value of the future liabilities owed to current pensioners ($565 million). This statement totally
ignores that
(a) there was a Pension Buffer Fund specifically set up for this very purpose by the Fiji Parliament;
(b) that Pension Buffer Fund (which had lump sums paid into it and pensions paid out) was not
credited with the interest which it was entitled to,
(c) that this Pension Buffer Fund would have accumulated to more than $850 million by now- i.e.
$300 millions more than the $565 million that is admitted (for the first time), to be the present value
of liabilities to current pensioners.
Part 2 of Decree: the Board will be non-discriminatory: False Claim 2:
Part 2 of the Transition Decree claims that the FNPF Board will be “non-discriminatory”.
Yet Clause 8 (titled “Top ups”) is all about arbitrarily discriminating between different classes of
retirees- whether they are currently receiving less than $100 per month, receiving between $100 ands
$300 per month, and more than $300 per month. Subsection 8 (2) states that for those pensioners
currently receiving less than $100 per month, and who wish to convert their lump sum to the new
annuities offered which will of course be less than $100 per month, the Board will arbitrarily offer
$100 per month. i.e. the FNPF now will become a welfare organization, (with whose permission?)
subsidizing current low annuity pensioners at other pensioners’ expense. So cross-subsidization will
continue, whatever the Decree claims.
I will also bet you, that the over-paid drafters of this Military Decree have never thought about
those retirees who might currently have an annuity less than $100 per month, only because they took a
partial lump sum upon retirement.
Subsection 8 (3) states that if any pensioners are currently receiving more than $100 (bad drafting?
it should really be stating that if a pensioner is receiving between $100 and $300 per month) and they leave all
their lump sum entitlement with the Fund and take the new annuities being offered, then they will
receive either their current annuity or $300, whichever is the lesser. i.e. those pensioners currently
receiving between $100 per month and $300 per month will be left alone.
Subsection 8 (4) then states that if you are currently receiving more than $300, and leave all your
lump sum entitlement with FNPF and take the new annuity rates that apply to you, then you will
arbitrarily have your lump sum increased by $10,000 or 25% of your existing lump sum, whichever is
less.
Why are they giving this small “bonus” lump sum option rather than just raising the annuity
rates? Because they want future retirees to receive the lower annuities. They will give a small lolly to
existing pensioners, whose contracts they know they are breaking. So for any particular retirement
age in the past, pensioners will lose a higher proportion of their annuity, the higher was the lump
sum they left in the Fund: i.e. the more you trusted the Fund, the bigger is the percentage you will be
losing.
For a lump sum of $100,000 you will lose 36% if you have just retired, the loss increasing to 50%
if you are age 66, and then decreasing to 46% if you are about 72 years old now.
How astonishing for a Decree that claims that the FNPF will be non-discriminating! This
Transition Decree, contrary to its claims, is discriminating between all kinds of retirees,
discriminating by age and by lump sum originally left in the Fund The Military Regime and the
FNPF Board have set themselves up as redistributing agencies between pensioners or all kinds.
How do they intend to make sure that future pensioners and future contributors are not
discriminated between? Aaaah. You do not need to be an Albert Einstein to figure this out, do you?
Just as they allegedly eliminated discrimination between past pensioners and current contributors.

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What of the future?
Many current and future pensioners are asking what they should do. Should they take the lump sum
being offered, or the new annuity rates? Sorry, I have no answers for you.
But there is a quiz in the previous article which current pensioners can rack their delicate or tired brains over, if that’s
any help.

32. FNPF’s Selective Quotes (2011) (Cens)
    [Fiji Pensioners, 3 December 2011]

Key words: Bainimarama Government, coup collaborators, Fiji National Provident Fund (FNPF),
FNPF Board, FNPF Transition Decree 2011, The Pensioners, workers’ representatives
t is unfortunate that the FNPF management selectively quotes me from what I said in Parliament
in 1998 (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 Parliament did
approve these changes.

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) overall 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 15% 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 selectively quote my 1998 parliamentary views to justify the current actions by the FNPF and the
   Regime (as FNPF management has often attempted) is thoroughly dishonest.