71pc have below $10k
26 November, 2018, 11:38 am
LOW income, irregular employment and employers paying minimum wage have been cited as reasons why 71 per cent of Fiji National Provident Fund (FNPF) members had balances below $10,000.
FNPF’s chief executive officer Jaoji Koroi said latest statistics showed that only 29 per cent of its 429,936 members had balances over $10,000.
He said the other factor contributing to the low savings was the “continuous withdrawals by members”.
Mr Koroi said a lot of employers in the country were paying minimum wages to their workers.
“Therefore, low income is also a contribution to low membership balance,” he said.
“Membership with low balances have come down progressively over the years but it is still a huge percentage in terms of the membership.
“Of this, 57,000 members are over 50 years and will exercise their retirement option in the next five years, so it is still a challenge in trying to get members to save more for their retirement.
“There is still a challenge in saving for retirement in terms of whether you access your benefits now or for retirement and that is your choice.”
As for FNPF, Mr Koroi said they were trying to emphasise the need for members to save for higher retirement benefits.
“The low member balances is a challenge and that is why in the reform, one of the actions we have taken is we have separated the members account and now 70 per cent of the members’ balances are preserved for retirement, meaning they can only access that during retirement.
“Therefore, members can only access 30 per cent of their contributions for their pre-retirement for education, house funerals et cetera which only comes out of the 30 per cent.
“We have realised that in the past members were accessing their funds like a bank, drawing money from it for almost anything.”
Mr Koroi made these statements while speaking at the fund’s North annual member forum in Labasa last Saturday.