The Fiji National Provident Fund (FNPF) said it has enough cash to pay out to members who lose their jobs as a result of the COVID-19 pandemic’s impact on the Fijian economy.
Amid growing concerns that the Fund is being used to compensate for government’s lack of direct assistance to out-of-work Fijians when it unveiled its COVID-19 response budget last week, FNPF CEO Jaoji Koroi said the superannuation fund’s liquidity and solvency were healthy and robust that there was no need for alarm.
“For your comfort, we have about F$400million (US$175million) cash in the banking system and that’s not including the deposit we hold with them,” he said in a media conference yesterday.
“We have projections for the next 12 months and we’re adequately covered in terms of our cash flow so as far as we’re concerned, there’s sufficient funds for us to meet our obligations,” Koroi said, adding that FNPF recorded a net reserves of F$1.3 billion last financial year and solvency was also currently being reviewed.
The Fijian government in its COVID-19 response budget, had announced that FNPF members employed in the country’s tourism sector – the first to buckle under COVID-19 – may withdraw up to F$1000 (US$437) to assist them as the country waits for normalcy to return.
As well, members in the currently-quarantined Lautoka city were eligible for F$500 (US$218) each.
Some 43,000 workers are immediately eligible under the two assistance measures but as money would be deducted from their own accounts, Koroi said not all may want to withdraw.
However, in case they do, around F$40m (US$17.5m) was ready to meet that obligation.
“It’s doable,” he said. “We did Cyclone Winston [FNPF’s relief package to eligible members after Cyclone Winston ravaged the country in 2016] and that was around F$276 million, so cash is sufficient to meet all these things.”
The Fund already offers unemployment benefit for its members but this has been reduced from F$2,000 per member to F$1,000 to streamline processing.
It is expected that members outside the tourism sector who lose their jobs during these harsh times may apply for that.
As Fiji’s largest financial institution with over F$7billion (US$3billion) worth of assets in 2019 and half the population as its members, FNPF is a major force in the stability of the country’s economy, with around 42 percent of that $7b invested in Fiji government securities in Fiji and in the international financial markets.
It has not ruled out buying more in the upcoming government issuance to finance the F$1billion COVID-19 response budget.
“We’re no different from any other superannuation funds as everywhere else, they’re all going for treasury bills. The stock markets have fallen by 20-30 percent so this [government securities] is a safe investment that is giving us the returns,” Koroi said.
The Fund is also a significant investor in the tourism sector, being owner or part owner of some of Fiji’s top hotels, which have either closed or are in the process of closing as the global tourism industry is brought to its knees by COVID-19.
Koroi said the FNPF will use the current slowdown to refurbish some of these hotels.
