What Goes Up Must Come Down: New Revelations on FNPF Pensions and Rick Rickman's Letter

FNFP Pay Shock
By Leone Cabenatabua in the Fiji Sun
Some Fiji National Provident Fund (FNPF) pensioners have been paid more than three times what they and their employer contributed towards their pension, it has been revealed.

Documents obtained by the Fiji Sun indicated that some have received more than $1 million from the fund. This is even when they had only $300,000 as their pension amount. When contacted yesterday about the documents the FNPF failed to respond before this edition went to press.
The FNPF is analysing and evaluating submissions made by the public over its proposed review of its Act and Pension Scheme. It is looking at reducing the pension rate from 15 per cent to nine. This is to ensure the fund remains sustainable and can pay people who are working now for their pension in the years ahead.
These payouts have been ongoing since way before 2006.
FNPF consultant Shauna Tomkins said earlier that the current policy was paying out pensioners at the cost of current members' contributions. This is as numerous pensioners are still on 25 per cent and 15 per cent rate.
The documents with the Fiji Sun reveal the following payments done to pensioners as to date. Names of the pensioners are withheld.
  • Pensioner A. Retired in 2002 with a FNPF pensionable balance of $320,000. Amount paid by FNPF to date is $612,000. Receiving a monthly payment of $5800.
  • Pensioner B. Retired in 1999 with a FNPF pensionable balance of $353,000. Amount paid by FNPF to date is $1.1m.  Monthly payment of $7400.
  • Pensioner C. Retired in 1990 with a FNPF pensionable balance of $71,000. Amount paid by FNPF to date is  $341,000. Receiving a monthly payment of $1480
  • Pensioner D. Retired in 1992 with a FNPF pensionable balance of $95,000Amount paid by FNPF to date is $285,000. Receiving a monthly allowance of $1300.
  • Pensioner E. Retired in 1989 with a FNPF pensionable balance of $110,000. Amount paid by FNPF to date is $598,000. Receiving a monthly payment of $2300.
  • Pensioner F. Retired in 1996 with a FNPF pensionable balance of $389,000. Amount paid by FNPF to date is $1.3 million. Receiving a monthly allowance of $7000.
Rick Rickman’s letter (FS 3/7/11) follows:

To justify the reduction of FNPF pensions your reporter used six examples out of 11,000 (Your headline Saturday, July 2).
Of course those examples had to be the most extreme.
Clearly your reporter has a source within the FNPF management, since their whole campaign has been to base the blame for the present situation on the pensioners (which in fact has been brought about by management’s previous changes in the structure of the buffer fund).
Why did you not ask your source how many pensioners had died within 1,2,3,4 and 5 years of signing a contract for a monthly agreed pension and what happened to those funds?
Why did you not seek the average paid and include that in your article, or would the censors not permit it?
Why did you not ask for access to independent reports that have been critical of the funds present management, and have been withheld from the members?
Why did you choose not to fully publish a comprehensive analysis?
The ripples of this rock in the pond will go on.
There will be a great many more people who will not be able to justify the 50 cents or 80 cents for your daily publication.
Every area of the nation will feel the effects of any drastic changes in current pensions, which your newspaper appears to support.
The sun should rise in the East, not sink to the depths it sank to today

    Readers please note. Please make your comments on "Peter Ponders..." not here. This will keep all pension comments together.  If you can't see Peter Ponders when you scroll down to the bottom of the page, either click "Older postings" at the bottom right, or write Peter Ponders in the Search facility in the right sidebar.

    Comments

    Gutter Press said…
    Crosbie

    I’ll make my comment here and under Peter Ponders.

    I’m surprised that, having written you have no stand on the FNPF debate, you should have seen fit to place this obviously grossly biased article in your blog without at least having the fair mindedness to also include Rick Rickman’s rebuttal letter published in The Sun the following day.

    You own your blog and you’re at liberty to include in it what you please, however please don’t say that you ‘take no position’ when you so obviously have done. By publishing Mr Rickman’s letter even The Sun showed more fairmindedness than you
    Anonymous said…
    Croz I take exception to lumping the tea party with Sarah Palin on July 4th.

    However, the FWCC meetings was a Mama bears convention sans cubs.
    Croz Walsh said…
    @ Gutter Press ... I plead not guilty. I'm publishing, or providing links, to everything I SEE on the issue. I've not seen Rick Rickman's letter. Please forward it, or post it as a comment to "Peter Ponders" where all the FNPF comments are grouped. I've brought Peter Ponders forward so it won't require quite as much scrolling down. My "position" from the start had only two elements: 1) Clearly changes are needed for the fund to be substainable; 2) The changes must be fair, and progressively introduced. I later added a third. I thought members should have direct representation on the Board.
    Anonymous said…
    Croz,

    'Peter Ponders' has disappeared.
    Guttter Press said…
    Crosbie

    Thanks for your reply. Since you’re not a journalist and don’t set your self up to be, your selection of material on matters that you don’t have a position on would benefit from you actively seeking out an alternative view point before posting. After all you’re not subject to a journalist’s time constrants and the reason why many of us read your excellent blog is because we appreciate the research that you put into it.

    Rick Rickman’s letter (FS 3/7/11) follows:

    To justify the reduction of FNPF pensions your reporter used six examples out of 11,000 (Your headline Saturday, July 2).
    Of course those examples had to be the most extreme.
    Clearly your reporter has a source within the FNPF management, since their whole campaign has been to base the blame for the present situation on the pensioners (which in fact has been brought about by management’s previous changes in the structure of the buffer fund).
    Why did you not ask your source how many pensioners had died within 1,2,3,4 and 5 years of signing a contract for a monthly agreed pension and what happened to those funds?
    Why did you not seek the average paid and include that in your article, or would the censors not permit it?
    Why did you not ask for access to independent reports that have been critical of the funds present management, and have been withheld from the members?
    Why did you choose not to fully publish a comprehensive analysis?
    The ripples of this rock in the pond will go on.
    There will be a great many more people who will not be able to justify the 50 cents or 80 cents for your daily publication.
    Every area of the nation will feel the effects of any drastic changes in current pensions, which your newspaper appears to support.
    The sun should rise in the East, not sink to the depths it sank to today
    Croz Walsh said…
    @ Anon 2... Blogspot only allows so many postings (or days) on its main page. To see older postings, click "Older postings" at the bottom right. I've increased the main page from 10 to 21 days but it doesn't yet seem to have worked. Another way to see this be to write Peter Ponders in the Search facility, right sidebar.
    Peter said…
    Yes these clearly are extreme examples outlined in The Sun but it appears that FNPF has little choice but to use these to illustrate the problem that the current system is simply too generous. People just don’t seem to be getting it…FNPF can’t pay out more than it receives in contributions together with the investment earnings. It’s been identified for years as a structural problem by the IMF, World Bank and the ILO - The current Government and FNPF management have not made up this situation.

    I wonder what will be the public’s view in 20 years’ time if, as a result of all this opposition, FNPF decides not to proceed with reform and nothing is done? The Fund then becomes insolvent and the children of those now opposing change get little or no pension. The public will be screaming and wondering why sensible reforms were not implemented now and in time to give all pensioners a fair return on their contribution? The house was burning but everyone just watched and no one bothered to throw any water on it!

    Perhaps FNPF should consider allowing an independent actuary nominated by the Unions to consider Mercers’ analysis? At the moment people are just refusing to give the Government/FNPF any credit at all that they might, just might, be trying to do something for the long term benefit of the country. You might dislike the Government but that does not mean everything they are trying to do is evil.
    Gutter Press said…
    Peter
    It’s quite obvious to most people that the pension scheme is unsustainable in its present form. How the future scheme will operate evidently has yet to be decided.

    I don’t think the complaints that are being made are against any reform at all. The complaints being made are against the ‘possibility’ that previously agreed arrangements will be reneged on.

    Some pensioners have taken out long term commitments based on their guaranteed income - for example upgrading their homes to accommodate extended family members (since many younger families are battling to buy or even rent). They object to the fact that it appears as if their pensions may now be reduced by up to 40% which would clearly make previously agreed repayments impossible. They will then run the risk of losing their homes to the mortgage holders

    It is this uncertainty for PRESENT pensioners that is being objected to, not the reforms for FUTURE pensions. The FNPF could quell those fears at the drop of a hat – if it chose to.
    Anonymous said…
    There are pensioners who are supporting family members who live with them - spouse, grandchildren etc and may also be paying medical bills for relatives on medication, all the bills for the household -water, electricity, city rates,cooking fuel and food bills. Should not such circumstances be verified before a reduction in pension funds ?
    Gormenghast said…
    Reading Rick Rickman's letter brings one to the absolute conclusion: what the hell is a censor doing in the middle of a mess like this?

    This FNPF situation will be the undoing of the entire Set Up. We must surely see this?

    No one in the 21st century is going to put up with such nonsense. Far beyond the farcical. More into the maniacal. Whoever thought that the people would suffer such rubbish: political neophytes!
    Gormenghast said…
    Reading Rick Rickman's letter brings one to the absolute conclusion: what the hell is a censor doing in the middle of a mess like this?

    This FNPF situation will be the undoing of the entire Set Up. We must surely see this?

    No one in the 21st century is going to put up with such nonsense. Far beyond the farcical. More into the maniacal. Whoever thought that the people would suffer such rubbish: political neophytes!

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