Pension cuts must be opposed

[posted 29 June 2011,1615]

The Fiji Labour Party welcomes and fully supports the legal action taken by former Human Rights Commissioner Shaista Shameem and her client David Burness against the FNPF’s arbitrary decision to cut pension rates to 9%.

The Party calls on all trade unions and the workers themselves to support the move and to strongly oppose any cuts to the FNPF annuity rates.

FNPF is acting in a most draconian manner, taking the simplest way out of its dilemma, without giving any consideration to other more humane options of ensuring that the Fund remains sustainable in the long term.

The Fund is not in any immediate danger, therefore, we do not see why there is such a rush to carry out ‘reforms’ which will see huge cuts to the existing rates of pension of between 25-15%.

However, if the Fund is worried about its long term sustainability, then we believe the ‘crisis’ has been brought about as a result of gross mismanagement and bad/negative investments which have robbed the members of more than $800 million.

We refer, in particular, to the millions that have been lost through the ATH venture, and the Natadola, GPH and Momi Bay projects. The Natadola write down itself was $301m. ATH shares worth $90m were bought for $276m and over $80m were spent on Momi Bay.

These risky investments were taken at the instigation of the State and the State, therefore, has a duty and responsibility to reimburse the fund with the millions lost as a result of such imprudent investments.

It must be remembered that the FNPF is first and primarily a pension fund and not an investment bank for the government. The Fund cannot now penalise workers if under pressure from the government it embarked on ventures that resulted in such huge losses.

A 9% rate of annuity is ridiculously low. It will not provide a retiree with a liveable pension in old age particularly considering that almost 65% of our workers earn wages below the poverty line.

Furthermore, if the reforms come into effect from July 1, as widely anticipated, then it is clear that FNPF was acting in bad faith when it went through the farce of carrying out public consultations, and in taking out an ad on Saturday which gave assurances that all public submissions will be taken into consideration.

The entire exercise was conducted without transparency. A study of the the FNPF’s future viability should have been undertaken by an independent body rather than consultants appointed and paid for by the Fund.

We reiterate our call for all to support the current move to oppose the pension cuts. Fiji’s workers have the right to live and retire in dignity.

MP Chaudhry