50 per cent drop in FNPF contributions
25 October, 2020, 9:45 pm
Compulsory member contributions to the Fiji National Provident Fund (FNPF) have dropped from around $55 million a month to about $22m a month, says general manager member services Alipate Waqairawai.
However, he said, FNPF had $570m in accounts and cash reserves and would be able to meet the solvency or the promise to pay members in both COVID-19-related and the normal withdrawals members were entitled to.
Speaking to The Fiji Times on Wednesday, he said the decline in contributions by more than 50 per cent was because of the reduction in compulsory contributions announced by Government in March.
“When members’ contributions are reduced from 8 per cent to 5 per cent, and 10 per cent to 5 per cent, there will be a reduction in contributions,” said Mr Waqairawai.
“FNPF, like any other organisations, will experience those reductions. We used to collect around $50m to $55m and now it’s down to $22m to $25m a month.”
In a bid to assist employers get through the economic crisis caused by COVID-19, Government had announced the halving of statutory employer contributions from 10 per cent to 5 per cent effective from April 1 to December 31, 2020.
Employees’ compulsory contribution of 8 cents per dollar earned was reduced to 5 cents.
The measure was expected to save employers a total of $210m in compulsory FNPF contribution payments for the duration of the waiver.
Mr Waqairawai said the reduction in contributions on FNPF’s daily operations was being monitored and managed well and would not affect its ability to assist members in both COVID-19-related withdrawals and normal withdrawals members were entitled to.