THE FIJI National Provident Fund has recorded a net surplus of $115million, even after paying out $127million to pensioners who opted for a lump sum withdrawal early this year.
This was revealed yesterday by chief executive officer Aisake Taito at the announcement of the audited financial results for the financial year ending June 30.
"The audited financial results reflect the outcome of the reforms over the last 12 months based on the principles of sustainability," Mr Taito said.
He said the total members' balance grew by $200 million to $3.2 billion from $3billion in 2011.
There were more withdrawals than contributions by members.
"Contribution collected increased by $13.8million from $303.5million in 2011 to $317.3million."
However, he said withdrawals for this period increased from $309.5million to $318.2million that was attributed to increased housing and flood assistance pay out.
He added the increased housing assistance was mainly because of the low housing rates offered by local banks.
Therefore, he said this resulted in a negative contribution of $0.9million.
For interest paid to members in 2012, he said it was 5 per cent resulting in the distribution of $139million to members' accounts.
"The fund's net assets increased to $3.9billion from $3.8billion in 2011 as the result of the net surplus."
He said the total investment income was $249.9million in 2012 compared with $238.8million in 2011. This was largely attributed to high returns in FNPF's investments, both domestic and off-shore, he added
In line with industry best practices, the FNPF has separated the pension business from the contribution business.
"Assets worth $252million were set aside for the new-established Retirement Income Fund pension payments."
Under the new Decree, he said the FNPF through its actuary was required to provide a solvency and funding certificate to the Reserve Bank of Fiji.
"We are happy to inform that this has been issued to the RBF to confirm that FNPF has sufficient assets to meet its liabilities, even under adverse circumstances.
"FNPF would not declare a negative interest rate on members' balances, even if investment returns are unfavourable in a particular year."
He said the general operating environment was demanding, characterised by subdued investment, high liquidity in the financial system and declining interest rates.
Nevertheless, Mr Taito said the FNPF board and management remained focused to deliver on their commitment to create value for their members.