#header-inner img {margin: 0 auto !important; #header-inner {text-align: Center ;} Fiji Coupfourpointfive: FNPF Transition Decree: last nail in the FNPF coffin

Saturday, December 3, 2011

FNPF Transition Decree: last nail in the FNPF coffin

By Dr Wadan Narsey

The illegal President has signed the unlawful “Fiji National Provident Fund Transition Decree” which trashes lawful contracts between FNPF and pensioners, takes away their basic human rights to personal property, and removes their basic human right to take their just FNPF grievances to court (while it shamelessly claims that no one’s human rights are adversely affected by this Decree).

The FNPF Transition Decree claims in Part 2, that:
“the principal object of this Part is to ensure that the arrangements for the provision of annuities by the Board are sustainable, non-discriminatory, and do not involve cross subsidy of one group (pensioners and annuitants) by another (FNPF members).”

Such phrases are also in the draft FNPF Act, and the drafters have no idea (or they don’t care) how internally inconsistent all these phrases are even within their Decrees (elaborated below).

The Decree makes a pathetic attempt to justify itself by referring to IMF, World Bank, ILO and “actuarial experts” who we know all recommended reductions of future annuities, but none recommended the breaking of lawful contracts and basic human rights to property nor of denying recourse to justice for existing pensioners. 

These agencies need to be publicly challenged as to whether they lend their support to this unlawful Decree which undermines laws of contracts and fundamental human rights of pensioners in Fiji.

The Decree has five Parts:
Part 2:  Terminates the current pensioners’ claims
Part 3:  Share investment scheme (not commented on here)
Part 4:  Protections (what a farce).
Part 5:  Regulations (not commented here)
Part 2:  Trashing lawful contracts

Despite the FNPF CEO’s strange claim that pensioners do not have a “contract” but an “agreement”, the facts all suggest that pensioners do have lawful contracts approved by the elected Fiji Parliament:
I remind again, Article 4 of the FNPF Act states that the FNPF Board shall be a body corporate and shall, by the name of "The Fiji National Provident Fund Board", have perpetual succession and a common seal .... The Board may sue and be sued in its corporate name and may enter into contracts.
(a) the contracts were freely offered by a corporate body, FNPF, on the OP-9 form all of which were signed by pensioners and accepted by FNPF.
(b) On Form 9-OP, the FNPF informed the retiree that if he chooses to take the pension options, he will receive exactly this or that annuity (annual sum of money in dollars, and exactly this or that precise percentage of his final balance) payable for his lifetime (single pension) and the lifetime of his last surviving partner (in the case of the lower double pension). The FNPF warned pensioners “Once you have made your choice it is final and cannot afterwards be changed or revoked.”    The pensioners had entered a legal contract which could not be changed by them.

But the FNPF and the Military Regime clearly think that they can do whatever they want.

Part 4: Protections: Stealing pensioners’ lawful property
Article 17 of the Universal Declaration of Human Rights (UDHR) says “Everyone has the right to own property” and “no one shall be arbitrarily deprived of his property”.
Have a laugh if you thought that Part 4  of the Transitional Decree titled “Protections” was about protecting you, the pensioners and your property.

Do you really believe Subsection 11 (2) of the Transition Decree which brazenly claims “the relevant provisions are not to be taken to provide for a deprivation of property of anyone”.  What a farce. 

By all relevant criteria, the current pensioners’ FNPF annuities are real financial property, guaranteed by a lawful contract guaranteed by elected Fiji parliaments.  Yet for virtually everyone currently receiving more than $300 per month, their entitlements are going to be drastically reduced – by between 30% and 54% of their lawful property. i.e.

The total loss to existing pensioners, in present value terms, will amount to more than $150 to $200 millions in aggregate (I roughly estimate).

Given that Australia and NZ do not recognize the Military Regime or its unlawful decrees, FNPF pensioners who are being adversely harmed might think about suing FNPF in Australia or NZ where FNPF has investments.

Part 4 “Protections”: Denying Human Rights of Access to Justice
Clause 11 of the Regime’s Transition Decree shamelessly states the following, straight out of Animal Farm: (1) “The relevant provisions are not to be taken to be inconsistent with a human right or a similar right of any person”.  What a farce. i.e. the Military Decree assures you, in legal gobble-de-gook, that your human rights are not being harmed.  What a farce.

Article 8 of the Universal Declaration of Human Rights (UDHR) states  “Everyone has the right to an effective remedy by the competent national tribunals for acts violating the fundamental rights granted him by the constitution or by law”.

Article 10 of the UDHR “Everyone is entitled in full equality to a fair and public hearing by an independent and impartial tribunal, in the determination of his rights and obligations...”.

But Subsection (3) of Part 4  of the Regime’s Transition Decree states:  “No court, tribunal, or other adjudicating body has jurisdiction or power to accept, hear, determine or in any other way entertain any challenge by any person, or to grant any remedy or relief to any person in respect of” (a and b) the validity of the Decree and (c) “any loss or damage suffered by any person...” as a result of the provisions in the Decree.
(4) states if there is any relevant claim before any court, “the presiding judicial officer, without hearing or in any way determining the proceeding of the application, shall immediately transfer the application to the Chief Registrar of the High Court for the termination of the proceeding or the application...” and “a certificate to that effect shall be issued by the Chief Registrar of the High Court”.
(5) states if any relevant proceeding has already been started but not determined, that proceeding is also terminated.
(6) in case some brave judge thinks otherwise, the Transition Decree sternly warns that any court that is currently hearing  such a proceeding, “must, on application by the Attorney-General ... issue a certificate to the effect that the proceedings .... have been wholly terminated..”.
And under (7) Such terminating certificates cannot be challenged in court.

Bottom line:  the judiciary will not be allowed to hear your case, even though it involves a lawful legal contract entered into between FNPF and pensioners (backed by elected Fiji Parliaments), your basic human right to personal property, and your human right to go to court with your just grievances.

Tough luck for the Burness/Shameem case, eh?
The very fact that this Military Decree stops all legal challenges is clear evidence that the Regime knows that the FNPF case will not stand up in court. 

Why else would they have Part 4 in this Decree, alleging “Protections” – yeah, protection of the Military Regime against legal action. So much for the separation of the judiciary from the State.

Part 2 of Decree:  False claim Number 1
Part 2 of the FNPF Transition Decree claims that the lumps sums the pensioners left in the Fund and the investment income thereupon (allegedly amounting to $310 million), cannot meet the present value of the future liabilities owed to current pensioners ($565 million). 

This statement totally ignores that:
(a) there was a Pension Buffer Fund specifically set up for this very purpose by the Fiji Parliament;
(b) that Pension Buffer Fund (which had lump sums paid into it and pensions paid out) was not credited with the interest which it was entitled to,
(c) that this Pension Buffer Fund would have accumulated to more than $850 million by now- ie $300 millions more than the $565 million that is admitted (for the first time), to be the present value of liabilities to current pensioners.

Part 2 of Decree:  False Claim 2:  the Board will be non-discriminatory.
Part 2 of the Transition Decree claims that the FNPF Board will be “non-discriminatory”. Yet Clause 8 (titled “Top ups”) is all about arbitrarily discriminating between different classes of retirees- whether they are currently receiving less than $100 per month, receiving between $100 ands $300 per month, and more than $300 per month.

Subsection 8 (2) states that for those pensioners currently receiving less than $100 per month, and who wish to convert their lump sum to the new annuities offered which will of course be less than $100 per month,  the Board will arbitrarily offer $100 per month. i.e the FNPF now will become a welfare organization, (with whose permission?) subsidizing current low annuity pensioners at other pensioners’ expense.  So cross-subsidization will continue, whatever the Decree claims.

I will also bet you, that the over-paid drafters of this Military Decree have never thought about those retirees who might currently have an annuity less than $100 per month, only because they took a partial lump sum upon retirement.

Subsection 8 (3) states that if any pensioners are currently receiving more than $100 (bad drafting - it should really be stating that if a pensioner is receiving between $100 and $300 per month) and they leave all their lump sum entitlement with the Fund and take the new annuities being offered, then they will receive either their current annuity or $300, whichever is the lesser.
i.e. those pensioners currently receiving between $100 per month and $300 per month will be left alone.

Subsection 8 (4) then states amazingly, that if you  are currently receiving more than $300, ands leave all your lump sum entitlement with FNPF and take the new annuity rates that apply to you, then you will arbitrarily have your lump sum increased by $10,000 or 25% of your existing lump sum, whichever is less.

Why are they giving this small “bonus” lump sum option rather than just raising the annuity rates?  Because they want future retirees to receive the lower annuities.

They will give a small lolly to existing pensioners, whose contracts they know they are breaking. So for any particular retirement age in the past, pensioners will lose a higher proportion of their annuity, the higher was the lump sum they left in the Fund:  i.e. the more you trusted the Fund, the bigger is the percentage you will be losing. 

For a lump sum of $100,000 you will lose 36% if you have just retired, the loss increasing to 50% if you are age 66,  and then decreasing to 46% if you are about 72 years old now.

How astonishing for a Decree that claims that the FNPF will be non-discriminating! This Transition Decree, contrary to its claims, is discriminating between all kinds of retirees, discriminating by age and by lump sum originally left in the Fund.

The Military Regime and the FNPF Board have set themselves up as redistributing agencies between pensioners or all kinds.

And how do they intend to make sure that future pensioners and future contributors are not discriminated between? Aaaah. You do not need to be an Albert Einstein to figure this out, do you?  Just as they allegedly eliminated discrimination between past pensioners and current contributors.

What of the future?
Many current and future pensioners are asking what they should do. Should they take the lump sum being offered, or the new annuity rates? Sorry, but all current and future pensioners have to answer this question themselves.

But there is a quiz in the previous article which current pensioners can rack their delicate or tired brains over, if that’s any help.


Anonymous said...

This from the same Wadan Narsey who in 1998 proclaimed the following in Parliament ...

"The bottom line is that if the pension is not sustainable … (and I think this was realized way back in 1992) … that higher rate of pension will be subsidized by all the younger generation who are coming in the future…"

Wadan, you and your family have the privilege of travelling and settling down in other countries ... we dont! We want a brighter future for ourselves and our children, if this means having to sacrifice some comforts now .. then so be it.

Anonymous said...

Thank you again Prof. Narsey, always clear and nothing but the truth.
I listened to the pathetic way in which FNPF tried to make everyone believe that the "contract" as we pensioners referred to it and "arrangement" as FNPF classified it, unfortunately my definition of contract as I gathered from the internet includes "arrangement", agreement etc, etc. whether written or verbal.
FNFP also tried to base their main argument from the Acturial report by the consultants, but as we also know, consultants will write down what they believe is what their master (the one paying them) wants. Prof. you had covered this in your earlier article about these consultants. They should have asked the pensioners to choose their own Actuarial consultant and they pay from FNPF since it is the pensioners money. We do not need acturial or rocket scientist to tell us what we know as the truth and the real cause of the problem - the coup that resulted in high loss of jobs and less returns to FNPF, mismanagement of funds(Natadola etc), soft loan to this illegal junta should pay this back at an agreed rate that keep the fund rolling without all this bullshoot about sustainability, etc etc, the list goes on and on.

Only God can help us now.

Useless Fiji military said...

Why are the useless and cowardly Fiji military allowing this unelected taliban pig to destroy the nation?

Anonymous said...

This decree ensures that this regime continues to operate beyond 2014 if the people come to their senses and realise the truth.

Anonymous said...

Well done Warden...keep it up. Such an evil regime, and Fiji would certainly be the worlds most complacent people.

Anonymous said...

I think its a good idea to help the poor.

Coup 4.5 said...

Dr Narsey replies

Selective quotes from my 1998 Parliamentary contribution to justify current changes:

I normally do not react to anonymous criticisms of what I write. I will respond to this one- because the FNPF management has also similarly selectively quoted me from what I said in Parliament (all there in Hansard of 13 August 1998, pp. 499 to 505).

The Fiji Government in 1998 Parliamentary had proposed to gradually reduce the single pension annuity rate from 25% to 15% by one percentage point per year. This is what I said (and the Hansard shows that I was even attacked by my own NFP colleagues in Parliament then):

“Once you realize that the funds are not sustainable at 25% and you conclude that, through actuarial studies that the real sustainable rate for the funds is 15% of your final balance to be given as pension, why do you not bring in that change straight away because if it is not sustainable, it is not sustainable. You are saying that those young people who are working now, and who will be working over the next ten years, will be contributing out of their income to maintain us older people at 25 percent or 23 percent, but when it comes for them to retire they will only be getting 15%”.

It was my professional view then, as now, that the annuity rates above 15% should not have been offered by the FNPF Board, and Parliament should not have approved that change. But they did.

1. These single annuities above 15% were

(a) good business gambles for those who lived on long enough

(b) bad business gambles for those who died early;

(c) bad business decisions by the FNPF Management and Board then (who may have had conflicts of interest), and Parliament which approved that recommendation.

2. But once these rates above 15% were verified by Parliament in the Laws of Fiji, and offered by FNPF quite explicitly on the OP-9 form, they became lawful contracts which cannot be broken.

3. Nowhere in my 1998 contribution did I say that existing contracted pensions above 25% should be arbitrarily reduced to 15%.

4. The current FNPF/Regime proposals are about further reducing the annuity from 15% to 9%

(a) without the approval of the Fiji Parliament,

(b) with the public being denied all the actuarial studies and reports on FNPF investment disasters

(c) unlawfully reducing the existing annuities already contracted by FNPF.

To try to selectively quote my 1998 parliamentary views to justify the current actions by the FNPF and the Regime (as even FNPF management has often attempted) is thoroughly dishonest.

Dr Wadan Narsey

Anonymous said...

Dr. Narsey,

We are presently living pre 1874 and so there is no dishonesty possible.

It was a practice at that time to take old people (retirees) out into the bush to die.

What the Bati is doing now is culturally acceptable for the time warp we are living in.

Anonymous said...

The fact that 2006 take over by Frank was illegal stuck out like dogs balls and the fact that Burness case against FNPF was going to win hung out like bulls balls.

How easy it is to rule by Decree.

According to Christians the God of this World will rule until his return.
It can be safely decreed that the God of this World has a few good agents in charge in Fiji.

Anonymous said...

What is being done is criminal, but this crime is being done by whom?

Is it by the Prime Minister alone or was it a Cabinet Decision.
If it was by Cabinet I am surprised that there is not one resignation.

Ultimately there is one individual whose signature enacts law, and that is the Presidents signature.

What a shame and a pity.

Anonymous said...

Who will be crazy enough to take the "retirement " package in the future.

I can only think that every retiree will take the lump sum option.

Future Forests of Fiji please keep you doors open for these retirees and try to put a sustainable package together for them, they are being left out to dry.

Anonymous said...

Dr Narsey
Where were you with your economic analsys whe fiji had 2 previous coups. Why are you so anti noe against current regime.
You are enjoying overseas and creating unnecesary tension for us in fiji. Why dont you come and live in fiji and see the realities- none of the text book stuff you teach at uni.

Anonymous said...

I agree with you Wadan. The single annuity rates were indeed a gamble, the winners were those that lived longer; the losers FNPF and current members who have to subsidise the generous pay-outs. So it's only right that FNPF do the right thing now ... correct the injustice of the past; and ensure that our children get the pension they deserve. I agree also with you that Form 9 you continue to refer to is a contract. But an important question arises, what's the contract worth, if FNPF is not able to meet the pension liability or paypouts? I would rather take home less than nothing at all. Lastly, Wadan you are an esteemed professor of economics, the FNPF said their decision was based on actuarial advise ... how different is economics from actuary?

Anonymous said...

Such a prophetic statement from the learned professor ... "why do you not bring in that change straight away because if it is not sustainable, it is not sustainable". Indeed, it justifies the revised pension rates.

Anonymous said...

who do you think MR Narsey made that comment???

Anonymous said...

Dr. Narsey, what are is your opinion of NFP and its current stand. It would be interesting to know if NFP shares your views. You do provide an alternative commentary.

Delta Entity said...

Beathtaking arrogance from the illegal and liar regime in Fiji. Thank you Wadan for you incisive analysis. Clearly, the illegal regime is basically one big band of robbers supported by a lamusona and gutless military. By the way, Fijian society is also
intellectually vacuous and they certainly deserve all the crap that is being shovelled their way! Your nation is being plundered, your institutions destroyed before your eyes. Yet, you keep drinking kava in your koros as your country goes down the toilet.

Clan of Ten said...

Dr Wardan

The retirees, goverment and the FNPF should not be blamed.

Lets blame today's generations. In the next 20 to 50 years 60% of the polpulation will be the over 60s andf 40 % will be the under 60s.

Accordingly, approx 40% of the workforce will contribute in funding of the 60% retirees.

Solution - lets encourage our children to marry young and have children.

Clan of Ten

Anonymous said...

If one has been following the series of articles written by Dr. Narsey and understands them, then you will appreciate the following

1. You can not change a contract mid stream.

2. The FNPF made an offer and a contract.

3. Once this offer and contract was accepted FNPF must fullfill its obligations.

4. He states (as do the consultants)
that a. for contracts written there is enough funds to meet these obligations
b. failing this, then government guratees must be utilized.

5. He observes that if interest accrued from the appropriate account was correctly credited to that account then there is enough funds for the purpose of meeting all present obligations....and if not, once again government gurantees must be invoked.

6. Furthermore he underlines the law/regulations/contracts and how they have been subverted by the incoming decrees. Simple observations that any layman can understand.

7. As to the Parlimentary debates at the time when it became blantantly obviuos that a pension set at 25% of you balance at retirement was unsustainable, Dr. Narsey was one of 71 Parlimentarians in the house, not one of 1,sometimes 2.

8. In respect of No.7 above. Dr. Narsey's contribution was highly appropriate and consistent, nor did he ever suggest altering contracts in place with FNPF. Nor did he support a gradual scaling down by 1% over a 10 year period.

9. If the country had listend to Dr. Narsey at that time there would definetly be no question of bankruptcy of FNPF but the draconian decrees would be in all probability still going ahead because a military junta needs to keep paying a mercenary army and supporters for its loyalty.

10. Despite the fact we should have cut directly to 15% in 1998, Dr. Narsey still believes that all contracts can still be "honoured".

11. He states and we all need to understand that "the members, contributors,shareholders,owners" are without representation. ALL DIRECTORS ARE APPOINTEES OF GOVERNMENT!!!!!!!
Given this reality, then the Gurantee by GOVERNMENT is appropriate, considering any cockup must be ultimately laid at their feet.

This writter does not have money in the fund .
This writter did not support the coup but understood why it happened and did not shed a tear for the outgoing Parliment. It was a complete embarrasment to ourselves and the world
a. from previous template we were heading into a couple years of calm and a re-look at our electrol system. ( no problem with that)
b. what I do not now accept is the permanent dictatorship of one person and the utter corruption this has brought down upon us.
c. everything offered is sand in the mouth for lack of freedom.
d. there is now only ARROGANCE, the Crown of Evil

Ram Sami said...


Do you have a vested pecuniary interest in this matter ?

Meaning, are you curently on an over-generous FNPF pension ??

Anonymous said...

Dina says....

we are all suffering because of this bloody coups and greedy power hungry like Frank, Shameem's & Aiyaz & the stupidity dog's in the military officers just going with the flow.

Anonymous said...

All the traitors too FIJI should be lined up and shot when a Democratic Government elected in Fiji. Only people propping up this illegal Military junta are the CHINESE Government.

Anonymous said...

Any comments from Lionel Yee ?

Anonymous said...

Keep barking Wadan, Your thesis or publication will be sold and proceeds will be given to you. RU still memeber of NFP?
Pl apply for similar post in Fiji or USA and see what you get?

Anonymous said...

@Anonymous 12:03
Now you can see why we are pushing for Democracy rather than coups.
Because in Democracy you have a voice. In Dictatorship you don't.
The only voice that dictators understand is the voice of a bullet. Look at all of them Sadam Hussein, Qadafi, Mubarak etc etc etc. The only thing that will change their mind is a bullet.

There will be no election in 2014

I now advocate military intervention by Aust, NZ & USA to free us from this tyranny.

Otherwise in 5 yrs time we'll be still blogging but no more FNPF left.

-Valataka na Dina.

Anonymous said...

There is no need for election. I have jst spent 2 weeks in fiji and met a number of fijians and others. All have said they are very happynwith the current regime and they do not want elections, for the sake of democracy, as these will bring in a lot of self interest persons.

Anonymous said...

The design of the new pension is simply put - victimising the successful people who sacrificed their time and efforts to further their careers and get good jobs which then increased their contributions to FNPF which put more money in their pockets through pension payments.

Mind you we did not have the option to join or otherwise, It was required by law that we join the Fund.

The pensioners who made the sacrifices are the people who are now feeling the full brunt of this decision by this illegal management and illegal regime.

It is not FNPF's duty to look after the poor in this Nation. This is the duty and responsibility of the Government of the day - illegal or legal!

The design of the scheme must be to serve the interest of the members and government and especially illegal ones who grabbed the leadership through the barrel of the gun should not even be involved in the Fund's business. PERIOD!

Anonymous said...

Board members - a contract is a contract...meet it or f*&^% off - resign!You reading this Tom Ricketts.

Management, if you can't perform, your a$#@ needs to be fired.


Adjust contracts going forward, honour existing contracts.

If you can't do that then let the owners, shareholders try. If they f*&^ it up then they will have nobody to blame but themselves and there will be no government gurantees.
But before government hands back to the owners, they must back date all the concessionary interest rate they stole, with compound interest.

So whats cheaper? A gurantee that might not be needed or pay back the money you stole. If the owners had invested their money overseas, even 25% would still be possible now.

Warren Buffet alone would have multiplied one million into over a billion dollars, Microsoft similar.

F*&%$#@g incompetent thieves.

December 4, 2011 12:32 PM

Ram Sami said...

Comments from Lionel Yee please ??

How did he expect to pay pension at the rate of 25% ??

How much has he collected from FNPF ???

Anonymous said...

With all these euphoria...can someone please enlighten us...how much does this snobbish and arrogant Aisake Taito make in a year...I mean salary and all the fringe benefits. If the pensioners are going to suffer...at least they should see for themselves how much exactly is Taito making???

Anonymous said...

Too many questions being asked for others to provide some sort of answers.

Lets just ask our own selves. Do I like what this regime has done and is doing ?

If your answer is no then again ask yourself; Do I just stand by and watch them do whatever they are doing ?

If your answer is again a no then seriously start thinking and planning what things you can do to contribute towards toppling this evil regime.

The UN, US, AUS, NZ or any other would not do it for us. It is us, the people living in Fiji; we will have to bring the regime down even if it means making the ultimate sacrifice !

Anonymous said...


QEB Monitor said...

Clan Of Ten

U arr so full of bullshit rhetorics...it is a pity that all u do as a soldier and supporter of Bainimarama forklifting and mama-bothing is writing useless comments here...WASTING GOVERNMENT MONEY THROUGH YOUR WAGES

The retirees, goverment and the FNPF should not be blamed.

Lets blame today's generations. In the next 20 to 50 years 60% of the polpulation will be the over 60s andf 40 % will be the under 60s.

Accordingly, approx 40% of the workforce will contribute in funding of the 60% retirees.

Solution - lets encourage our children to marry young and have children.

Clan of Ten

Anonymous said...

@ Valataka na Dina 11.37pm

Unfortunately, it's your own "native baracas" that are campaigning against democracy for Fiji.. and here, you're ask for foreign intervention from democractic nations?

Man, you guys arr too funni, hahahaaa.......

Anonymous said...

Everyone still paying there FNPF ?????

Anonymous said...

OK people becareful about paying out money to Varinava Tiko's Access
United Agency...another fly by nights, security operation! It's astounding how crooks pops up every where, during the Voreqe's watch? Is this new operation supported by the Military Government? An excellent way to move out ex-military people so they can't pull a counter coup against Voreqe.Seems like its all in the AG plan?

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