The Fiji National Provident Fund had $10 billion worth of assets compared to $7 billion worth of liabilities on June 30, 2022, with the fund saying the liquidity risk is managed actively to avoid any damage to the reputation of the fund.
This is stated in the 2022 FNPF Annual Report that was released recently.
The $10 billion worth of assets is a combination of $8 billion worth of financial assets and $2 billion worth of “guaranteed interest income from fixed income risk free portfolio investments”.
“The asset and liability matching is an economic indicator of managing short and long-term liquidity risks. Net positive asset and liability funding gap signifies effective management of the fund over a long-term retrospectively,” states the report.
“In terms of offshore investments, the fund is limited by Reserve Bank of Fiji (RBF) exchange regulations. RBF exchange control approves all outward funds transfers required for offshore investments.
“Due to an almost non-existent secondary market, most of the fund’s local investments in capital and money market do not have the opportunities of secondary trading.
“The fund’s treasury department manage the above liquidity risk through monthly reporting on the position of these investments to the Board and Board Investment Committee.
“The fund’s liquidity risk is managed on a daily basis in accordance with the fund’s treasury policy and investment policy statements.
“Stress testing and scenario analysis are done on a regular basis. Generally, the fund ensures availability of sufficient liquidity to meet its liability on maturity under normal and stressed conditions.
“The liquidity risk is managed actively to avoid any damage to the reputation of the fund.”
