Solomon Islands Provident Fund to pay $77.5m to members

Solomon Islands
SINPF Building in Honiara

Solomon Islands National Provident Fund (SINPF) has awarded a 2.65 per cent interest to its members for the financial year 2021 to 2022.

Supervising Finance minister Dr Culwick Togamana announced the rating saying the “Interests worth $77, 490,621(US$9.44 million) will be credited to members’ accounts as of September 30, 2022,” Togamana said.

He said the SINPF board met and approved the award for its members that will be applied to their retirement account balance on June 30, 2021 and credited to their accounts on 30th September 2022.

“As you all know that the past 6 months to June 30, 2022 had been a challenging time for our national economy and the fund as we experienced the November 2021 riots and community transmission of the COVID-19 virus in January and April of this year,” Togamana said.

He added the rebounding global economy was challenged by the Ukraine war in February 2022.

Togamana said the results of this major event is now escalating energy and food prices tilting the global economy towards recession.

“These domestic and global events, challenges and risks had greatly impacted on the financial performance in particular on the annual revaluation of the fund domestic unlisted equities and listed traded equities for the financial period ending June 30, 2022.

“In considering the crediting rate award the board is extremely conscious of the current economic volatility driven by the ongoing impacts of the global economic uncertainties.

“Notwithstanding these challenges the board is also confident that with the current large investments for the PG23, implementation of major infrastructure projects, and the focus on the Solomon Islands, our economy will strength.”

Togamana thanked the board, management and staff of SINPF for giving its members the crediting rate despite the difficult financial times.

CEO and Manager of SINPF Mike Wate said the Board declared a 6.0 percent crediting rate for its members last year.

This, he said, was done on a strong turnaround in the national and global economy as the country learn to live with and have more knowledge on the pandemic.

Wate said the Board made both positive cash incomes from investments and revaluation gains from unlisted equities and offshore traded equities.

He said at the close of financial year on June 30 this year, five positive gains quickly evaporated.

“One – the November 2021 riots, second – the COVID-19 community transmission in January 2022, when lockdowns and restrictions were imposed during these two periods, third – supply chain challenges, and fourth – the impact of the Russian Ukraine war on energy and food prices and financial markets, and the fifth increased sovereign risk for Solomon Islands, due to the November 2021 riots.”

He said though the Fund’s draft cash incomes reached more than $174.5million(US$21.34 million) from cash dividends, interest and rentals and its cash profit after expenses of more than $72 million (US$8.83 million), large revaluation losses from unlisted equities and traded listed equities due to the above external events eroded these cash gains resulting in an overall loss for the Fund of $173 million (US$21.21 million).

He said SINPF is now finalising its 2021 audited financial accounts and is expected to be signed off at the end of next month whilst at the same time progressing into its 2022 financial audit.

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