The Bainimarama government has been using the country’s national pension fund as a private cash cow to underwrite risky loans and pay for pet projects, putting the safe retirement of thousands of Fiji’s workers at serious risk, according to a shocking new report.
It comes amid rising concern among Fijian politicians and advocates about whether the Government’s use of the Fund to purchase a 30 per cent stake in Fiji Airways represents a prudent investment of workers’ retirement savings
This has been made worse by the Bainimarama government’s pandemic response, reducing mandatory contributions and forcing workers to draw on their own pension savings to survive the economic upheaval brought on by COVID. As a consequence, the viability of the Fund as a Pension Fund, and the ability of the Fund to enable its pensioners to sustain themselves on the pensions has become questionable, and is contrary to its motto- “Securing your Future” .
With $8.2 billion in assets and almost 450,00 members, the FNPF is the country’s largest, most important financial institution.
The fund’s contributions are compulsory and Fijian workers are entitled to a retirement pension at the age of 55, along with housing, medical and education assistance.
However, workers’ future is in peril with the Bainimarama government racking up multi-billion dollar debt liabilities with no plan to repay them or replace the retirement reserves they have plundered.
“The Fiji National Provident Fund is not there to solve the development problems of Fiji nor be a convenient cash cow to underwrite risky loans for the Bainimarama government’s pet projects,” said Scott Macdine, ITF’s Coordinator for Sydney Office.
“According to Fiji’s Bureau of Statistics, three out of ten Fijians were living in poverty in 2019-2020, and since then its estimated those numbers have doubled because of the massive economic impact of the COVID-19 pandemic.
“These are the people the pension fund was set up to protect and the Bainimarama government is not only letting them down but playing fire with their future.
“The FNPF members, pensioners and taxpayers deserve a fund that is run in their best interests – not in the best interests of the Bainimarama government.
“This financial disaster is likely to have devastating economic repercussions for ordinary workers and the country as a whole.”
The report makes a number of recommendations including:
- An urgent review and reform of the FNPF’s governance structure
- Worker representation on the FNPF Board of Directors as funders and primary stakeholders of the Fund
- Separation of asset investment and management of the Fund from the functions of the Board of Directors
- Regulations and laws government the FNPF that stipulate clearly what fiduciary duty means in practice
- Regulations that stipulate how the interests of members are defined and reviewed in consultation with members