The Parliament has passed a bill to allow the Vanuatu National Provident Fund (VNPF) to start paying retirement benefits to its members when they reach 47 years of age, down from the previous 55 years.
The Minister of Finance and Economic Management, Johnny Koanapo, says the new bill will allow Vanuatu National Provident Fund members to start accessing their benefits eight years earlier.
The bill which amends the Vanuatu National Provident Fund (Amendment) Act No of 2020, improves and updates the governance of the VNPF, which manages Vanuatu’s only compulsory pension retirement scheme.
The bill addresses problems identified in a 2016 Commission of Inquiry into alleged mismanagement, illegal and improper conduct by past and then-current Vanuatu National Provident Fund staff, that had to led to financial losses.
A Vanuatu Parliament Explanatory Note attached to the bill said the bill provided amendments to the Act based on recommendations of the 2016 Commission of Inquiry report.
“Some of the amendments are also necessary as the Act is outdated, and silent and restrictive on issues affecting the fund,” the Parliament’s Explantory Note said.
During the parliamentary debate on the bill, Minister Koanapo said the Vanuatu National Provident Fund was currently managing VT22.7 million of members’ funds which he said was a sign the fund had a “healthy status”.
The Minister said the fund had given out around VT2.1 million in member entitlements.
Minister Koanapo said the new bill would back Government efforts to make sure “the provident fund will continue to take good care of its members’ money and invest funds properly to ensure the benefits go back to the members”.
Minister Konapo says the passage of the bill would ensure four per cent of workers’ salaries are deducted into their Vanuatu National Provident Fund savings.
The Minister said the amendments will also allow business owners, farmers and seasonal workers involved in Vanuatu’s labour mobility programs to Australia and New Zealand to save money in the Vanuatu National Provident Fund.
He says their contributions would be determined by “how much they want to put into their fund saving accounts”.
The Vanuatu National Provident Fund was established by the Parliament in 1987 to ensure Vanuatu’s workers got retirement benefits and that their savings for retirement were well-managed by a legal entity.
It is important for the workers in Vanuatu to be members of the fund, because the country does not have a government funded social welfare scheme that takes care of people when they can no longer work.
As well as bringing forward the age that benefits can be received, the Bill regulates appointments to the VNPF Board and their functions and provides new guidelines for the investment of members’ funds and for offences and penalties under the Act.
After two days of debate, the Opposition supported the Government’s bill and it was passed unanimously.
The Vanuatu National Provident Fund bill was the first bill to be debated in Parliament in its second ordinary sitting.
