Is NPF robbing contributors of their entitlements? Part II
Written by Esther Lameko Poutoa
Wednesday, 23 July 2008
The Editor
The Newsline
Dear Sir,
Is NPF robbing contributors of their entitlements? Part II
The answer to your attention-seeking headline is a big bold NO.
Let me explain the situation in unemotional and clear language.
Interest Crediting
The normal practice at SNPF is that profits confirmed by audited accounts are used as a basis for the declaration of a dividend payout in the future. Thus, the profits for the 2006/2007 financial year (ending June 30 2007) were used for the determination of the 7% interest. The 7% is calculated on the members’ accumulated contribution balance as at 1 July 2007 and it is actually credited to members’ accounts 30 June 2008.
This has always been the traditional practice over the 35 years. It is consistent with the Act.
The Former CEO and Contributor refers to 2 provisions of the National Provident Fund Act. Section 25(2) expressly provides that “The Board shall cause to be credited to the account of each member of the Fund……interest at that rate (the declared by the Board for that financial year) on the amount standing to his (the member’s) credit in the Fund at the commencement of such financial year….”.
All contributors have received the proper amount of interest.
The Former CEO and Contributor has correctly referred to section 35(1)(a)(iii) which, along with other options, permits withdrawal if a member has attained 55. My staff inform me that he chose that option.
The Act says “he (the member) may elect…..(iii) to withdraw the entire amount standing to his credit.”
The Former CEO and Contributor has been paid “the entire amount standing to his credit.”
The Act is silent as to whether members receive interest at all on the credit in their account between 1 July and the date of withdrawal. The practice of the Fund, however, has been to pay interest for the number of months involved up to the date of withdrawal on the balance as at 1 July. The Former CEO and Contributor has been paid that amount.
True it is that the former CEO only last year changed the practice of 35 years to calculating interest on the balance at the date of withdrawal. True it is that the Fund has reverted to the original practice.
The reason is simple. To treat members equally.
The practice introduced by the previous CEO meant that members could make large contributions, even perhaps knowing they were going to withdraw, and receive more than a member whose contributions remained with the Fund for the whole financial year. When it became apparent members were exploiting the change to the detriment of continuing members the Fund changed the practice.
Short term Loans - The new loan scheme
Next, the Former CEO writes “Obviously, this new policy again robs members from their own funds, with similar effects on non-payment of proportional interest for unaudited periods as explained in the first incident.(sic)”
The need for the Scheme was clear.
At present, the majority of members never pay off their existing small loans but roll them over until they finally withdraw their contributions, which is normally at 55 years. IF NPF was to increase the entitlement to loan to 60%, it is likely that most people would retire with just 40% of their accumulated contributions earned over the years. This is less beneficial for members. The 9.5% on the existing small loan scheme is interest charged annually and continuously on small loan balances up until withdrawal date.
The new loans will be repayable over 2 years and have no effect on a member’s balance on retirement.
At present if members have borrowed fully against their contributions they then take a loan with a bank. Members will also find that NPF offers the lowest interest rate compared with other financial institutions.
Insofar as the Short Term Loan scheme makes a profit, as I anticipate, that profit will be reflected in a higher rate of interest credited back to members’ accounts each year.
4% for Retiring and Deceased Contributors
The Former CEO again wrongly refers to members being robbed of their entitlements. He refers to a Board resolution in January 2008. Board business is confidential as it is for most corporations, section 3A of the NPF Act. I myself do not intend to reveal Board business, its resolutions or any sensitive financial information.
NPF made a public announcement on this topic on 24 June 2008.
It said that “ The Board wishes to recognize the contribution of its longstanding members and to create incentive to work and contribute to the Samoan economy.
The bonus will be 4% as from 1 July 2008 until the Board resolves otherwise.”
No one has been robbed. There is no entitlement until 1 July 2008.
Staff
The Former CEO has labelled my staff and me as “incompetent and negligent”.
The staff have my full and unqualified support. They are enjoying a re-invigorated NPF and their work makes a most important contribution to all Samoans who are members of the Fund. Those staff members, coincidentally all appointed on his recommendation, served the Former CEO loyally and faithfully in the past. They are not incompetent. They are not negligent.
NPF has a serious statutory obligation to act in the interests of all its members.
Under my stewardship as Chief Executive Officer, NPF will act responsibly, properly, fairly and without fear or favour.
Esther Lameko Poutoa (BA Acc(USP), MBT (UNSW), CPA (SAM), SA Fin (AUS))
CHIEF EXECUTIVE OFFICER
SAMOA NATIONAL PROVIDENT FUND
Is NPF robbing contributors of their entitlements? written by Agnes,
July 24, 2008
NPF woman boss needs to calm down and come down in a low manner. You just been there at the helm of the ship for a short time and we dont want to see temper flaring. You are a christian person.
Loto maulalo, Samoa
... written by simoli,
July 24, 2008
Manaia lava le folasaga a le tamatai pule ole NPF. Ua lea foi ua manino ai lenei fai saofaga i nisi o mataupu e lei iloa muamua. Ae ua toe faaleaga lava le folasaga manino a le tamatai pule ile saini uma mai fua o ana faailoga. By doing that, it made her look like some arrogant, high and mighty person which I bet she is not (hope she is not). As Agnes said above, you have only been there for a short time , so calm down ma loto maualalo. E le manumalo se faamauluga ile silafaga ale Atua. I want to guess you got to where you are because of merits (I would like to belive that was the case) and every Samoan knows that..so no need to flaunt your qualifications in public as well!!.
Manuia tele le NPF ma ana taumafaiga uma mo Samoa ma ona tagata.
... written by C.W,
July 25, 2008
The NPF CEO is just informing the public on what exactly is going on so that people do not get the wrong idea. You do not need to criticise her on a personal level...leave her faith out of it. Personally i think that the former CEO is being sour. He has had his time in office and now he needs to give the appointed managers (that the board have selected to head the NPF) a fair chance to do what they believe is in the best interests of all contributors.
... written by iole,
July 25, 2008
Heck......browesed throug ex CEO'S input a week ago.... & current CEO'S respnse. Methinks what's her [ceo].... should have just ignored what's ....his name claims. Seriously....of all the NPF contributors.... [truly!] what is the % of them that can really say Yea....we r aware da..dada..! Eseta....go 4 it girl....no doubt the charming & noble Pule named u 4 da queen u're desitined 2 b. Sorry Meline pe afai ua le afanaia lou sao. Manuia le NPF....etc heheheh
... written by C.W,
July 25, 2008
Yes we as samoans are brought up to be humble and so forth but in the modern world it is practice to list your qualifications after your name..so get with the programme..it is not a sin to proudly show what you have worked hard to achieve..its a right. Good luck to the CEO and staff of NPF. Hope you dont have to put up with anymore people that are loto leaga.
... written by Piti,
July 25, 2008
Mo le NPF CEO, Malo le lava papale aemaise le faamalamalamga manino mo le au fai saoga ae silisili mo le faatuatuaina o ou tagata faigaluega. Ia saga tumau pea le alofa o le Silisili ese i lou tagata ma le aufaigaluega. E leai se afaina o le lisi o faailoga why not you worked hard for it.
... written by Mr Ben,
August 07, 2008
First of all, congratulations to the new CEO. malo lava. to Mr. former or ex. CEO. what is the complaining about? when you where boss, you never bothered to do anything about what you are complaining now. you should have known that one day you will be outside of the NPF office and standing in line like all of us to cash-out our NPF. I guess you got too comfortable with all the benefits and the big, big pay cheque. so malie lou loto, leaga ua leva na e iloa le mea la tupu ae ete nofonofo lava ma alu Golf aso uma. tofa and manuia le aso
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Loto maulalo,
Samoa