FLP writes to the President on FNPF
[posted 26 July 2011,1100]
The Fiji Labour Party has written to HE
the President Ratu Epeli Nailatikau to intervene in the FNPF pension
dispute.
The CEO of the Fund has threatened that
the reduction in the rates of pensions announced recently will be made
effective from September.
Initially, the reduction was to kick off
from July but was deferred following strong opposition by pensioners and
trade unions.
FLP has asked the President to appoint a
Commission of Inquiry into the FNPF as a whole, and in particular, into its
unilateral decision to reduce the pension rate from the current 15% to 9%.
We post the letter below:
20 July 2011
HE Ratu Epeli Nailatikau
LVO.OBE.,CSM,MSD,OStJ,jssc,psc
President of the Republic of Fiji
Government House
Suva
Your Excellency
re: Proposed cuts to the FNPF annuity
rates
I write on behalf of the constituents of the Fiji Labour Party (FLP) to
express concern at the proposal by the Interim Government and the Board of
the Fiji National Provident Fund to arbitrarily and drastically reduce the
rate of annuity to pensioners from the current 15% to 9% of their
contribution in the Fund.
The FLP is a mainstream political party
which has wide popular support and which won 33 seats in the House of
Representatives in the 2006 general elections. We speak for and represent
the views of our constituents on this vital matter, following widespread
consultations with them.
FNPF’s case is that the reduction in the annuity rate is necessary to ensure
the long term viability of the Fund. It engaged the services of overseas
consultants to study the issue and recommend measures to “reform” the Fund.
Based on these recommendations, it is now proposing to implement the
reduction.
We are concerned at the manner in which
the entire exercise was conducted, without any transparency. There was no
consultation with the stakeholders on the issue prior to the recommendations
being firmed up. No one knows how much the consultants were paid for a
report that lacks in-depth analysis of the situation, that fails to take
into consideration the socio-economic environment in Fiji, and more
importantly, fails to take account of the real factors responsible for
putting the Fund at risk.
Regrettably, the consultants do not appear
to have considered other options to restore the long term sustainability of
the Fund, without having to cause financial hardship to its members and
retirees.
Other soft options are available and
should receive preference over measures that will add to poverty and misery
in the community.
We have attempted to provide a possible
solution which we believe is pragmatic, achievable and consistent with the
objective of the Fund to provide financial security in old age. We feel
strongly that the government should not rush to give its seal of approval to
the consultants’ recommendations without taking a serious look at other
available options.
Our alternative proposals are outlined in
the attached paper and we urge that due consideration be given to have the
paper discussed at the appropriate level and with the stakeholders before a
final decision is taken.
We believe that if the Fund is at risk
today, it is because of gross mismanagement and a series of imprudent and
highly questionable investments made by the Fund at the behest of successive
governments. Details are provided in our submission.
The just concluded exercise in holding
meetings and consultations that the FNPF engaged in was nothing but public
posturing. It was staged simply to put the consultants’ proposals across to
the people. We are reliably informed that the decision to execute the
so-called “reforms” had been made and that they were scheduled to come into
effect from July. This date has now been deferred to September as per a
recent announcement by the CEO of the Fund.
If this happens, it will be another
disaster for our hapless people. It will mean that some 80% of our senior
citizens will be forced to exist in poverty with a monthly stipend that will
be well below the poverty level. At this rate, there will not be enough
money to put food on their table, let alone pay for medicines and other
needs of elderly citizens.
Wage rates in our country continue to be
quite low - at least 60% of the work force receives wages below the poverty
line of about $180 a week. There is also an absence of any other social
safety nets such as unemployment benefits, free/subsidised medicare or old
age pension. Under the circumstances, a drastic reduction in the rate of
pension, as proposed, will not allow our workers/senior citizens to retire
in dignity on a liveable rate of pension.
Quite apart from the fact that these cuts are totally unwarranted and
unnecessary, we submit very strongly that pension is too important a matter
to be left to an unelected and unaccountable government.
The FNPF is in no immediate danger of
collapse. It has sufficient reserves to meet its obligations and liabilities
into the foreseeable future. This fact is borne out by the information
provided in its latest (2010) audited accounts.
The issue is of great significance not
only to the present but future generations of workers and should not be
decided upon without a free and informed public debate and parliamentary
sanction.
Regrettably, free speech is severely
restricted under the PER, nor is there a parliament of peoples’
representatives to deal with the matter.
In the circumstances, and seeing the
resolve with which the interim government is arbitrarily pushing the
“reforms”, the only option the workers and retirees have is to seek Your
Excellency’s intervention by way of exercising the powers vested in you
under Cap 47 of the Laws of Fiji, to appoint an independent Commission of
Inquiry into the FNPF as a whole and, in particular, its arbitrary decision
to unilaterally implement changes to the rates of FNPF annuities (pensions)
which would greatly disadvantage the current and future recipients of
pensions.
We look forward to Your Excellency’s
favourable consideration of our request.
Yours sincerely
Mahendra P. Chaudhry
Leader/Secretary-General |