Here for the Pensioners , or here for themselves ???

It is time for ALL members and Pensioners to call for the immediate resignation/dismissal of these individuals who are not putting pensioners interest first.It was never the intent of the FNPF that the fund should make profit from pensioners. Under CEO Aisake Taito this has changed, as the above figures clearly indicate, the fund is paying minimal rates to pensioners while skimming profits for themselves.

The following article has been moderated, the original can be seen at Coup 4.5

>http://www.coupfourandahalf.com/

The current Government of the Day 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., etc., 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).

And 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 Government 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 Government to keep any contract?

Quiz for pensioners:  will the FNPF 2011 Decree change anything at all at FNPF?

The current FNPF Board and Management has been appointed by the same Government that is drafting this FNPF decree.  Answer “Yes” or “No” to the following questions:
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Revised FLP paper on the proposed ‘reforms’ to the FNPF

The long term viability of the FNPF can be maintained

without making cuts to the current rates of pension benefits.

Besides, pensions are too important a matter to be left to be

decided upon without free and informed public debate and

without considering other available options. Ideally, any

changes that need to be made should be left to a

democratically elected government with the mandate to carry

out such reforms.

Introduction

Years of mismanagement and plundering is threatening the long term

sustainability of the Fiji National Provident Fund, despite the fact that

it collects close to $300 million annually in members’ contribution.

The Fund is now proposing a series of drastic changes recommended by

hired foreign consultants, the most damning of which is a reduction in

the rates of annuity. Any such reduction will be a gross injustice to the

workers of Fiji who have contributed for years in the expectation that

they will receive adequate pension to be able to retire and live in

dignity in their old age.

The current annuity rate of 15% is to be reduced further to 9% under

the proposals now being considered by the Fund. Should this happen,

the ordinary worker will be lucky to pick $50 a week on retirement –

hardly a liveable payout – and well below the current poverty line of

$185 a week! It is to be noted that the annuity rate has already been

progressively trimmed from 25% to 15% in the past 10 years.

If the Fund’s viability is being threatened today, the workers should

not be penalised for it. The State must take full responsibility for the

current crisis at the FNPF – largely as a result of questionable

investment activity and failure to conduct timely sustainability reviews

of the Fund. A number of very large poorly or negatively performing

investments were made with the express approval of successive

governments and were influenced by political considerations rather

than the interests of the members of the Fund. As such the State must

be held accountable. (More on this later in these submissions).
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Commentary on Budget Announcement re ‘Civil Pensioners or those who fall outside the FNPF Scheme’- is this ‘windfall’ fair?

Dr Shaista Shameem

The Budget Speech on Fiji National Provident Fund Pensions was a shocker. Pensioners supporting the David Burness v FNPF and AG  case are still reeling from the implications of it for them, that is, having their FNPF contracts cancelled without compensation.

What astonished most pensioners, however, was the part of the budget speech titled ‘Pensioners’, on page 19 of the speech.

This part is quoted in full below:

‘Regarding civil pensioners or those who fall outside the FNPF scheme, they will receive an increase on their existing entitlements. The last time these civil pensioners received an adjustment it was for 1 percent, back in 2005.

This time, former civil servants, their spouses, former members of the disciplined forces, war veterans, retired judges, former prime ministers, ministers and former members of parliament will all receive a 20 percent increase on their existing entitlements’ (my emphasis)

From the perspective of the Burness case already in court, consider what this provision means. It seems judges who retire will get a refund of their FNPF balance (hard cash) plus a 20% increase in their judicial pensions.

An example may illustrate our disquiet in relation to this provision better: if Judge Smith had worked as a lawyer before being appointed a judge, he or she would have been a member of FNPF and therefore entitled to a FNPF pension. If Judge Smith had chosen to take the pension option, he or she would now be entitled, under the new decree, to both a refund of his or her FNPF balance, as well as a 20% increase in judicial pension upon retirement as a judge.

No one knows how many of the judges are members or beneficiaries of the FNPF pension scheme but the public perception that judges in this category will receive a windfall at the expense of other FNPF pensioners cannot be dismissed. FNPF pensioners’ pensions, on the other hand, are not inflation adjusted.

The possible implications of a decree bequeathing such a windfall on the hearing of the Burness case cannot be ignored or dimissed.  

A landmark House of Lords case is pertinent in this regard: In Re Pinochet Judgment of 17^th Decemner 1998 and 15^th January 1999, where the Law Lords said…’it is of the last importance that the maxim that no man is to be a judge in his own cause should be held sacred. And that is not to be confined to a cause in which he is a party, but applies to a cause in which he has an interest’.

Public perception in this instance, in which a FNPF pensioner’s pension is to be reduced significantly whereas judicial pensions are to be increased by 20%, all by decree, is surely something to consider quite seriously in light of the aforementioned Re Pinochet decision.

Under these circumstances what would be the judicial attitude towards the strike out application currently being made by the FNPF and Government in the Burness case? 

The illegal Military Regime has announced that they will make a Budget statement on their plans to reduce FNPF pensions.

Will there be yet another Military Decree purporting to revise the FNPF Act in order to reduce pensions, and stop legal challenges, such as the current Burness/Shameem case, supposed to be heard in February 2012?

The Coconut Wireless is hinting that the Regime/FNPF has devised a scheme which will give existing pensioners a “Hobson’s choice” or the “Morton’s Fork” between two options, both of which will mean that their current contracts with FNPF will be trashed.

Pensioners have no idea what will be thrust down their throats on Friday (for sure, no one will be singing “Thank God It’s Friday”), and some are now reduced to begging this Regime for “permission” to discuss their just grievances in the media.

While FNPF pensioners wait for that Friday drama, they might want clear their cobwebs on the following five statements (especially Statement 3) that the Military Censors will not allow in the Fiji media:

1. Existing FNPF pensions cannot be legally reduced under the FNPF Act and the laws on contracts.

2. The FNPF Act does not allow FNPF to vary the pension rates differentially for allegedly high and low income pensioners.

3. FNPF’s Buffer Fund does have the financial capacity to pay existing pensions at their current rates for another 18 years, if the Buffer Fund is 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, and should be responsible in the unlikely event that there are short-falls in FNPF cash-flows.

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.

These statements would all be elaborated in the Burness case, if it ever sees the light of day.

1

Essential background

The Fiji National Provident Fund is not a “government owned public enterprise” to be used for the benefit of the government, the Fiji public or tax-payers in general. It belongs only to the workers whose contributions have funded it, although their interests coincide often with those f the Fiji public.

Historically, however, FNPF has been totally controlled by successive governments, from its inception till today, both through legislation and actual operation.

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% and even till now, less than 35%.

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 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 a lawfully elected Parliament, and the people it represents.

But first, why has the ILO projection that in the long term some 35% of retirees would take the pension, never been reached?

The FNPF’s pension gamble: the “risk of dying early”

While actuaries and “smart rich people” 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 “excellent” pension offers.

Yes, excellent returns, but you could also die early, and lose all.
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Click on the following for details of the draft decree

FNPF Decree 2011 – A
FNPF Decree 2011 – B
FNPF Decree – 2011 C
FNPF Decree 2011 D
FNPF Decree – 2011 E
FNPF Decree – 2011 F
FNPF Decree 2011 – G

The Proposed (Draft) Fiji National Provident Fund Decree 2011: Commentary

Dr Shaista Shameem 

1.0       Introduction

The proposed (draft) Fiji National Provident Fund Decree 2011 is, unfortunately, a piece of law that will make life very complicated for the ordinary citizen of Fiji. This will be particularly so for members of the Fund and pensioners who may want to know how their pension benefits will be affected in light of the new retirement policy to be put in place by the Government. This brief commentary confines itself to two main issues highlighted by a survey of the proposed Decree, namely, (i) its lack of clarity due to shortcomings in drafting and (ii) its substantive content adversely affecting rights of members and pensioners.

2.0       Problems with drafting

 Recent decrees promulgated by Government have revealed serious defects in drafting and the proposed FNPF Decree is no exception. New laws are particularly vulnerable to drafting defects mainly because of lack of consultation due to the current legal milieu in which these decrees are drafted. Normally, drafts of legislation are put through a number of readings in Parliament. However, this rigorous process is unavailable in a situation where the executive arm of government drafts laws for promulgation by the President. Consequently, defects, which have the effect of weakening the law itself thereby thwarting coherent interpretations of it by courts and/or public officials, do ultimately undermine public confidence in the law-makers. When Parliament sits again in future, it would be advisable for its members to revisit all the decrees promulgated since 2009 to ensure compliance with basic drafting rules. This would reassure the public that the laws affecting them do not suffer from internal contradictions and inconsistencies, have prospective application only, and are of a sufficiently generalized nature as required by the basic rules of legal drafting.

The proposed FNPF Decree’s drafting problems are many. In relation to pensioners’ rights it is not clear in the wording whether the new law will affect those already on pensions. This is quite a serious defect because those keenly following the David Burness case (Burness v FNPF, Republic of Fiji and AG Civil Action No 183 of 2011), will not have a clue whether David Burness’ pension (or pensions of others) will be reduced pursuant to the new law. The commencement date for the proposed decree has not been provided and, given recent history, retrospective application of decrees is now quite common in Fiji. According to section 3, the Minister has discretion regarding the commencement date of the new decree. In fact, different parts of it will come into effect on different dates depending on whether or not the Minister is satisfied (inter alia) that the Board has complied with ‘Part 2 of the transition law’.

This brings me to another drafting defect. The phrase ‘transition law’, according to the interpretation section, refers to the new decree itself; however the long and short titles of the decree do not refer in any way to it being a ‘transitory law’- transition to what, one may ask. Will there be another FNPF Decree later? If so, when? Will that decree more explicitly reduce pensions already granted to pensioners?

Section 29 (1) of the proposed Decree is another example of lack of clarity resulting from weakness in drafting. The section states ‘The Fiji National Provident Fund established under the former law continues in existence under that name, subject to the other provisions of this law and any provision of the transition law’.  If, as the interpretation section states, the transition law is the decree, what is meant by the words ‘this law’ in the same sentence? Given that this is quite an important section because it is supposed to tell us what relationship the proposed decree has with the FNPF Act Cap 219, section 29 (1) of the decree is a perfect example of confusion in the minds of the drafters about what exactly they are reforming- the long title states the decree is to ‘reform the Fiji National Provident Fund’. So, the question is, what is the relationship between Cap 219 and the proposed Decree? And, if section 29 (1) states that the ‘former law’ is still in existence, why not just draft a simple amendment to it, instead of putting in place a new convoluted ‘reform’ decree?
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Today we mourn the passing of a beloved old friend, Common Sense, who has been with us for many years. No one knows for sure how old he was, since his birth records were long ago lost in bureaucratic red tape. He will be remembered as having cultivated such valuable lessons as: 
– Knowing when to come in out of the rain; 
– Why the early bird gets the worm; 
– Life isn’t always fair; 
– and maybe it was my fault. 

Common Sense lived by simple, sound financial policies (don’t spend 
more than you can earn) and reliable strategies (adults, not children, 
are in charge).

His health began to deteriorate rapidly when well-intentioned but 
overbearing regulations were set in place. Reports of a 6-year-old boy 
charged with sexual harassment for kissing a classmate; teens suspended from school for using mouthwash after lunch; and a teacher fired for reprimanding an unruly student, only worsened his condition. 

Common Sense lost ground when parents attacked teachers for doing the job that they themselves had failed to do in disciplining their unruly children. 

It declined even further when schools were required to get parental 
consent to administer sun lotion or an aspirin to a student; but could 
not inform parents when a student became pregnant and wanted to have an abortion. 

Common Sense lost the will to live as the churches became businesses; and criminals received better treatment than their victims. 

Common Sense took a beating when you couldn’t defend yourself from a burglar in your own home and the burglar could sue you for assault. 

Common Sense finally gave up the will to live, after a woman failed to 
realize that a steaming cup of coffee was hot. She spilled a little in 
her lap, and was promptly awarded a huge settlement. 

Common Sense was preceded in death, by his parents, Truth and Trust, by his wife, Discretion, by his daughter, Responsibility, and by his son, Reason. 

He is survived by his 4 stepbrothers; 
I Know My Rights 
I Want It Now
Someone Else Is To Blame
I’m A Victim

Not many attended his funeral because so few realized he was gone.  If you still remember him, pass this on. If not, join the majority and do 
nothing..

CHICAGO (Reuters) – When it comes to retirement, many middle class Americans said 80 is the new 65 and plan to delay retirement because of worries over money, according to a new survey.

Wells Fargo bank asked 1,500 Americans who earned between $25,000 and $99,999 and ranged in age from 20 into their 70s questions about retirement, savings and Social Security for its seventh annual retirement survey.

Three-fourths of those surveyed said they expect to work in their retirement years. One quarter said they will “need to work until at least age 80” to live comfortably in retirement.

Of Americans who will work in retirement, “47 percent said that they are going to continue in the same job or a similar job of similar responsibility,” Joe Ready, Well Fargo’s director of Institutional Retirement and Trust, told Reuters Insider.

“That raises a lot of social and economic implications. Will they have the physical ability to work, the mental capacity? What does that mean for the younger work force in terms of coming through and looking to get ahead?”

Three-fourths of Americans said it is more important to have a specific amount saved before retirement, regardless of age, while only 20 percent said it is more important to retire at a specific age regardless of savings.

In terms of saving for retirement, 53 percent of those surveyed said they need to significantly cut back on spending now to save for retirement.

“People are overwhelmed. They’re not saving enough,” Ready said.

On average, Americans have saved only seven percent of their desired retirement nest egg, with a median of $25,000 saved versus a median retirement goal of $350,000.

“For several years now, we’ve seen that Americans are undersaving for retirement and a majority do not trust the stock market as a place to invest for retirement,” Ready said.

“We did find a bright spot among middle class Americans – more than three quarters do not want to retire with mortgage debt. This is an important goal, particularly for younger Americans,” said Laurie Nordquist, director of Wells Fargo Institutional Retirement and Trust.

Eighty-six percent of respondents said it’s important to own their home debt free by retirement.

On the issue of Social Security there was an age divide. Those in their 60s expect Social Security to provide 46 percent of their retirement funding. But more than a quarter of Americans in their 20s and 30s expect no income at all from Social Security during their retirement.