15 Dec 2011

Expert says original Fiji pension scheme unsustainable

2:38 pm on 15 December 2011

An expert who has been brought in to assist Fiji with controversial pension scheme reform says change is long overdue.

Changes to Fiji National Provident Fund being made by the interim government include refunds on original sums invested, cuts in payouts and top-ups for pensioners on lower rates.

Geoff Rashbrooke, a New Zealand actuary, who specialises in superannuation systems says the current scheme is not sustainable.

He says as far back as 1992 the International Labour organisation warned the dividends were set too high.

"If they'd acutally made the changes 10 years ago maybe even 8 years ago they wouldn't have needed to cut the pension, but it's now gone on for so long that the adjustment had to be made. They've finally addressed something that previous boards and previous governments elected or military regimes have not been prepared to look at."

Geoff Rashbrooke says the way the system had been operating was a transfer from the poor to the rich.