The Fiji National Provident Fund Symposium, Reflections by Fr Barr
Fr Kevin Barr considers transparency and accountability, a just living wage, and compliance as they apply to the Fiji National Provident Fund, and sends me this email:
“I was happy enough with the media coverage of the FNPF symposium. A lot of good work had been done by the consultants but the reality is hard for many to accept.
If the fund is to be sustainable then (a) percentages available for pensions will have to come down from the current 15% and (b) people should not draw out large sums for other purposes during their working lives as if FNPF was simply a savings bank.
They are suggesting a 30/70 whereby the 30 will be available for certain identified urgent needs and the 70 will be preserved entirely for pension. They also suggested that, rather than people retiring at 55 they should target 60 or even 65 and then draw on pension funds. “
Transparency and Accountability
One of the worries expressed by many people is that we have been told that in the interests of honesty and transparency it is good that the loss of $327m is now written off. It is all in the past and we should be looking to the future. This sounds like the National Bank of Fiji scandal where we were told that “It is all water under the bridge. We should move on.” Yet this is the peoples’ saving we are talking about.
We are informed that Government guarantees FNPF funds so that the people will not lose their savings. The successive Boards which mismanaged/misappropriated FNPF funds were appointed by Government. Therefore in the interests of transparency and accountability Government should have the responsibility of seeing that the loss of workers funds is fully investigated and the funds returned to FNPF. Has an official investigation or commission yet been initiated?
A Just Living WageIn terms of building up a worker’s FNPF funds for a pension on retirement it is of vital importance that workers receive a just living wage set above the poverty line. Currently:
- 65% of workers in full-time employment receive wages below the current poverty line of $185 a week
- 50% of workers earn below $10,000 a year (some as low as $4,000)
- 71% of workers earn below $15,000 a year (the tax threshold)
One of the consultants (Richard Codron) said it was important that low income earners had obtained their own home and/or land during their working lives. But how is this possible with such low wages?
Tevita Nagataleka in his presentation mentioned that 10% of members were currently receiving 35% of FNPF pension funding. These are those who had been on high incomes during their working life. It is an indication of the level of inequality in wages in Fiji.
If a just living wage was required for all workers then their FNPF contributions would increase and their pensions on retirement would increase accordingly and help to keep them out of poverty.
Our present Government has been tackling corruption and racism but I think that it now needs also to target social justice for the workers of the country and ensure that they receive a just living wage. This will have serious repercussions on the alleviation of poverty during a worker’s lifetime and after his/her retirement.
Compliance and InspectionsWe know that some employers do not pay FNPF for their workers. Some deduct it from worker’s pay but do not pay it in to FNPF. In the past the Ministry of Labour and Industrial Relations undertook inspections and the enforcement of FNPF requirements. This role was then taken back by FNPF and there has been some improvement but many employers are still getting away with non-payment. It is good to see that in the proposed reforms compliance will be enforced and heavy penalties will be imposed on those who try to evade the new legislation.