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The Coalition Government has ruled out reinstating Fiji National Provident Fund pensions backdated to 2012. It cited the decision as both unconstitutional and financially burdensome.<\/p>\n
Cabinet made the decision after reviewing advice from the Ministry of Finance, the Fiji National Provident Fund and the Office of the Solicitor-General.<\/p>\n
The advice examined the legal, financial and constitutional impact of reversing the 2012 pension cuts.<\/p>\n
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The reforms were introduced under the FNPF Act 2011 and the FNPF Transition Act 2011.<\/p>\n
Independent assessments at the time found pension payments were higher than members\u2019 actual savings.<\/p>\n
The scheme was deemed unsustainable.<\/p>\n
Younger and current members were subsidising higher payouts.<\/p>\n
Government said restoring pensions to 2012 levels would weaken the Fund and threaten the savings of more than 430,000 active members.<\/p>\n
The estimated cost of full reinstatement is $582 million.<\/p>\n
This includes $372 million in back payments and $210 million in future liabilities.<\/p>\n
Government said the Fund cannot absorb that cost without affecting member balances.<\/p>\n
Funding it through the National Budget would strain taxpayers and public finances.<\/p>\n
Cabinet also cited the 2013 Constitution of the Republic of Fiji. Section 173(3) prevents Parliament or Government from changing the legal effect of the 2012 reforms.<\/p>\n
Government said it cannot undo past decisions or approve compensation linked to those reforms.<\/p>\n
Section 26 protects property rights. Government said FNPF members\u2019 savings are private property and cannot be used without consent.<\/p>\n
However, pension rates have been restored going forward.<\/p>\n
From 1 August 2024, affected pensioners began receiving reinstated payments.<\/p>\n
The measure is funded by taxpayers at a cost of about $57 million.<\/p>\n
Minister for Finance, Commerce and Business Development Esrom Immanuel said the government\u2019s foremost responsibility was to keep pensions actuarially sound and sustainable.<\/p>\n
He said the decision brings clarity and finality.<\/p>\n
He said Government cannot and would not retrospectively reinstate FNPF pensions to 2012.<\/p>\n