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Members' benefit

Geraldine Panapasa
Thursday, January 03, 2013

HIGH yielding investments in domestic, offshore bonds and term deposits which were locked in 2011 contributed to the increase in income for the Fiji National Provident Fund by $3.39million.

In its 2012 annual report, the fund said income totalled $242.7m compared to $238.8m for 2011 while two major loan accounts, under Commercial Loans, commenced servicing their debts.

"The fund structured its current account rates to earn maximum returns on the cash balances. As a result, the return on investment was 7.2 per cent compared with 6.8 per cent in 2011," the report said.

"This enabled the fund to credit 5 per cent to members' accounts on June 30, 2012. The income from the Retirement Income Fund (RIF) totalled $7.2m, reflecting four months of operations, bringing the consolidated investment income to $249.9m.

"Government securities remained the dominant asset class, making up approximately 58 per cent of the investment portfolio.

"A total of $240m in government bonds was transferred to the RIF as part of the pension reforms."

The report said investments in government bonds for the 2012 financial year held a value of $77.6m compared to $237m for 2011. The total portfolio closed at $1.98 billion compared to $2.06b in 2011, the report said.

"In terms of quasi-government securities, this portfolio consists of government guaranteed securities in statutory bodies," it said.

"The portfolio closed at $231m compared to $331m in 2011. Total investments in quasi-government securities totalled $5m compared to $51m in 2011."

The report said the significant decline in the total floats by quasi-government securities was attributed to competitive lower rates offered by commercial banks.

Meanwhile, the report said local rates continued to decline during the financial year. The portfolio closed at $104m compared to $173m in 2011.

"The (FNPF) board continued dialogue with the Reserve Bank of Fiji for additional approval of offshore investments resulting in the approval of $40m for 2012," the report said.

"This was in addition to the $150m approved in the 2011 calendar year. A total of $90m was invested mainly in foreign equities, bonds and term deposits during the year."

A total of $20m was also invested in foreign term deposits. This portfolio closed at $86m compared to $59m for 2011.





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