Older people live longer if they are happier, according to new research into the importance of emotional wellbeing.

Two recent media releases indicate that the FNPF Board and Management (at the instigation of the Military Regime) are digging the hole deeper for FNPF, with no accountability to the owners of FNPF, and media censorship stopping all public discussions.

The first is the bad restructuring of the $303 million loan by FNPF to Natadola Bay Resort Limited (NBRL); and the second is the massively risky $200 million loan to help Air Pacific buy 3 Airbuses in 2013, completely contradicting the most recent advice by recent consultants (Promontory) on sound investment policy for FNPF. 

Why interest free indefinite loan to NRBL?
The 2011 FNPF Report states that the $303 million loan to NBRL is being restructured so that while $100 million will draw an interest of 8% pa, the remaining $203 million will become an indefinite loan, and interest free.

FNPF will effectively in its accounts, give a $16 million subsidy annually to NBRL- some 40% of the total value of all the pensions currently being paid annually.

This is terrible accounting practice for three reasons.
First, any decent accountant or economist would advise that all transactions between a parent company and a subsidiary should be done at “arms length” with subsidiaries being charged the same interest rate that other borrowers are being charged.
To convert $203 millions into an interest free loan will artificially increase the apparent profitability of the subsidiary (NBRL), while reducing the apparent performance of the rest of FNPF.

Second, by not charging interest on the large loan, NBRL is being given no incentive to repay the loan as soon as possible- especially when it is “indefinite”.

Third, if in future, this Military Regime’s forced takeover of private assets at Natadola and vested in NBRL by Military Decree is legally and successfully challenged, then the assets of NBRL will become logical targets for litigants. 

The books for NBRL should therefore show its true worth- not artificially inflated through interest rate subsidies given by FNPF, which may then be claimed in future by legitimate litigants. 

Which financial institution in the world, gives an interest-free indefinite loan like this? Who dreamt up this scheme?  Who in FNPF management agreed to go along with this? Why would the unelected, illegal FNPF Board Members agree to this subterfuge to show the NBRL in a better light. Is it to allow more “write-backs” on asset value of this bad investment? 

Pie-in-the-sky loan to Air Pacific
Another far more dismaying media announcement has been the $200 million loan by FNPF to Air Pacific.  

If the current management at Air Pacific know what they are doing this loan may turn out OK for FNPF.
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Members please take heed this is FNPF money, YOUR MONEY

Fiji National Provident Fund Investments Limited (FIL) incorporated a total capital utilisation of $141 million for investments in the country says chief executive Aisake Taito.

The investments were for the financial year end 30 June, 2011.

Taito said some of the investments carried out by the FIL, a fully owned subsidiary of the Fiji National Provident (FNPF), were rehabilitated under the funds reforms programme including the Natadola Project, Grand Pacific Hotel (GPH) and some distressed loans. 

The subsidiary companies for FIL include Natadola Bay Resort Limited, Natadola Land Holdings, FNPF Hotel Resorts Limited, Grand Pacific Hotel Limited, Dareton Limited and Penina Limited.

Grey Power says:
For Penina Ltd,  read Tappoos, we remember the fiasco and the report given by Ernst & Young, relating to this loan, that was quickly covered up by instructions of a leading government minister, even though it was the FNPF members money and we had the right to be kept informed. No doubt another inquiry would establish that Penina is included in the distressed loans made by FNPF management. This used to be called throwing good money after bad. It is now called Assisting Friends of the Minister.

It boils down to or simmers down to DISTRESS for the FNPF Members, because it is our savings that are being pillaged by a group of immoral and arrogant individuals, who believe they are not accountable to anyone, least of all the people the money belongs to.

Despite having been constantly under the spotlight for undertaking major reforms this year, Fiji’s only superannuation fund has recorded a significant 16 per cent increase in the net operating surplus for 2011.

The Fiji National Provident Fund (FNPF) yesterday announced a net operating surplus of $242.6 million for the financial year ended June 30, 2011 compared to $209.5m in 2010.

A major contributor to this considerable increase was growth in investment income which grew steadily from $221.7m in 2010 to $240.4m in 2011 representing a 6.8 per cent return on investments.
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FNPF CEO Aisake Taito, right, works with Bijay Kumar to build railings at the Samabula Senior Citizen’s Home, Suva on Saturday. Picture: ELIKI NUKUTABU

THE Samabula Senior Citizen’s Home was treated to a makeover on Saturday by Fiji National Provident Fund staff members and their families.

The FNPF took a family day out to clean the home and entertain residents of the home.
“FNPF is a retirement fund care of the senior citizens of Fiji,” said FNPF chief executive Aisake Taito who was part of the clean-up.

He said they also prepared lunch for the residents. 
“There were donations of toiletries, a television, chairs and clothes,” said Mr Taito, adding the clean-up was carried out in conjunction with National Old Citizen Week.

FNPF staff member Angeline Prakash said she felt good and proud to  be part of the event.
“It is a good opportunity to come out and assist the old people,” said Ms Prakash. She said young people tended to neglect senior citizens. “This is a good time to give back to the community,” she said. 

Customer care staff member Krystel Gavidi said it was an opportunityto mingle with staff from other departments.

Grey Power Comment  

Grey Power is astounded at the hypocrisy of FNPF and Taito Aisake in this Fiji Times story.

Grey Power says that if the FNPF is trying to do a public relations exercise to mitigate and make up for the effects of its proposed policy to reduce pensions of the older people in Fiji (most of them are over the age of 65), then we have to tell him that the beneficiaries of the FNPF pensions whose lives FNPF is trying to destroy are no fools. 

Come on Mr Aisake Taito- FNPF helping the elderly? You can help them better by not destroying their pensions.

Drastic cuts in interest rates and the Bank’s policy of printing new money have delivered a triple blow to pensioners. Their income from savings has been sharply reduced, inflation is eating away at their capital and annuity rates, which determine the income from private pension pots, have fallen significantly.

Ros Altmann, the respected economist who is director general of Saga and a governor of the London School of Economics, estimated that recently retired pensioners were receiving £4,245 a year less than if they had retired just before the credit crisis. This amounted to a cut of 40pc.

Assuming that pensioners had £50,000 in savings and received interest at Bank Rate, their income from these savings would now be just £250 a year, compared with £2,875 in 2007 – a fall of £2,625 or 91pc – as a result of the Bank of England cutting Bank Rate from 5.75pc to 0.5pc.

Annuity incomes have fallen by about 21pc since 2007, Ms Altmann said. At that time a £100,000 pension pot would typically produce an income of £7,600 a year; now the same sum would yield only £5,980, fall of £1,620.
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The study conducted by the Fiji Council of Social Services in partnership with Help Age International finds that the elderly believe that there is a need for top up by government to compensate for the VAT and other taxes for those on FNPF pensions.

Can the board and management of FNPF please take note, “TOP UP” does not mean cutting pensions.

There are alternatives and whilst we can understand the reluctance of the FNPF Board to admit they have been hasty and not taken all factors into consideration, now is the time for them to reconsider and go back to the drawing board and act on the submissions received.

Clearly their original proposal was framed without consultation with the members, as proven by the presentations at Public Meetings.

Greybeard 

Minister for Pensions Steve Webb said:

“We’ve taken a decision to restore the link with earnings and increase the basic State Pension by the highest of prices, earnings or 2.5%. This triple guarantee will ensure that pensioners can expect a decent offering from the state in retirement.”

Alongside the new benefit rates, a consultation setting out proposals and seeking views on the impact of using the Consumer Prices Index (CPI) for private sector occupational pension schemes is also launched today. It looks at whether there is a case for making it easier for occupational pension schemes to move to using CPI. The consultation recommendations propose to preserve and promote confidence in saving into private pensions.

Steve Webb said:

“We do not believe that Government should intervene to give pension schemes powers to change their rules if they do not already have such powers and our consultation out today will seek views on this approach. We need to ensure that people can have confidence in their pensions.”

When a gang of armed robbers targeted a jeweller’s in a violent smash and grab operation, the coast was clear except for a frail-looking pensioner.
But the trio made a tactical error by ignoring the 82-year-old woman, who was peering into the window of the shop.

As they started smashing a reinforced pane outside the premises with two baseball bats and a sledgehammer, she turned on them with her walking stick

The brave woman refused to back down even when the men rounded on her and hit her over the head and they eventually fled the premises of G Davison & Sons in Leigh, Essex, empty-handed.

The pensioner was later treated in hospital as a precaution for a bump on the head but was released the same day.
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