Partner: Fiji National Provident Fund
Date: July 2016 – June 2018
Grant: USD 167,890
Target: 200-500 clients
Current reach: N/A
The 2012 Fiji Financial Competency Survey highlighted the very pervasive reliance by low income households on family or community support during retirement. Most respondents in households who were currently working did not consider that the forms of retirement provision available to the household would be able to meet all household expenses when they were no longer working.
The Fiji National Provident Fund (FNPF) is the only superannuation fund in Fiji mandated to collect compulsory contributions from employees and their employers to save for workers’ retirement. As of June 2014, only 32,767 (8.2%) of FNPF members were voluntary. According to the 2010-2011 Fiji Employment and Unemployment Survey (FBOS), there were 226,242 people who reported they were in some form of employment but not contributing to FNPF. These numbers suggest a considerable justification and potential to extend responsive pension coverage to the informal sector.
PFIP is working with FNPF to research, explore and pilot improved voluntary micro pension products targeted at the 140,000 Fijians without pension schemes who were either self-employed or working for wages. The aim is to create appropriate, affordable and flexible micro pension product offerings which better meet the needs of the target group to provide adequate funds for their retirement.
In the first phase of the grant, PFIP supported FNPF to undertake field research to determine the needs of the target group with regard to saving for retirement. The research evaluated the demand for pensions, informing the design of product features and benefits, communication strategies and the overall operational framework of the pension scheme.
The research found that demand for a micro pension product is strong, with more than 72% of target group respondents planning to rely on their own savings to provide for old age income, with more than three-quarters of the respondents interested in a pension product concept whereby half of the contribution is saved long-term and the other half can be accessed in an emergency.
In the second phase, a detailed validation and piloting framework for prototyping the voluntary pension product concept will be conducted. This will involve rapid prototyping to test client response to mobile payment interfaces (such as mobile apps) and other methods for making FNPF contributions, marketing messages and mediums and awareness raising around the need to save for old age.
As the study was done in parallel in the Solomon Islands, PFIP will adopt a uniform approach during the validation phase to establish a clear evidence-base for interest in old age pensions by the informal sector, financial viability as well as build a business case for both the National Provident Funds in the region.
The Fiji National Provident Fund (FNPF) is Fiji’s largest financial institution established in 1966 under the FNPF Act.
It is the only superannuation fund in Fiji mandated to collect compulsory contributions from employees and their employers to save for workers’ retirement. A key pillar of the Fiji National Provident Fund Strategic Plan is to add value to members through enhancing quality of life apart from building savings for retirement.
Apart from retirement savings, the FNPF also provides its members other financial services such as housing, medical and education assistance.