Koanapo advises VNPF Board against increasing contributions
October 10, 2024 9:40 pm | Posted in Business News | Share now TwitterFacebook
By Anita Roberts.
The Acting Prime Minister (PM) and Minister of Finance, Johnny Koanapo, has advised the Vanuatu National Provident Fund (VNPF) Board against increasing members’ contributions and surcharges.
An intention to review the monthly contribution rates for employers and employees to VNPF was revealed during the opening of the PENAMA VNPF Branch in April. Currently, the 8% rate is evenly split, with each contributing 4%. Employers who fail to pay face a surcharge or extra fee.
On his visit to VNPF this week, Minister Koanapo told the Board not to proceed with this yet. He said VNPF cannot ask for increased contributions when investments have not been providing enough returns for the members.
“I cannot justify this in Parliament,” he said.
He told the board to focus on improving current collection mechanisms for contributions instead of raising the rates.
Minister Koanapo urged the VNPF Board Chairlady, Shirley Abraham, and board members to ensure that the investments they are making on behalf of members are yielding good returns.
The Minister reminded them that members have the right to complain or voice their concerns if these investments are underperforming.
He asked them what they were doing with the non-performing investments. He pointed out that if these investments were underperforming during his previous term and still are, it suggests someone is not doing their job.
The Finance Minister told VNPF to strengthen governance regarding partial withdrawal at age 47. While members are eligible to withdraw up to 50% off their savings, the minister said the Fund should ensure members use their hard-earned funds responsibly.
Koanapo shared his views on the Anti-Money Laundering and Counter-Terrorism Financing Act (AML&CTF). He said it needs to be strengthened, as it disadvantages the operations of some institutions and businesses.
He encouraged VNPF not to fear taking risks and to consider investing in the domestic airline sector, as it has done so before with a VT1.2 billion guaranteed by the government.
Koanapo wants VNPF to explore opportunities as the government looks to prioritize the domestic airline. “We need to own our country, rather than allowing people from outside to control it. This is the true meaning of independence,” he said.
He told VNPF to strengthen its investment and policy guideline to achieve this.
He also told VNPF to strengthen VanPawa and to increase shares in UNELCO to 70%.
The Acting PM urged VNPF to work more closely with the government to boost economic growth.
He was accompanied by the Director General (DG) of Finance, Roan Lester, his First Political Advisor Benjamin Shing and the Member of Parliament (MP) for Tanna, Simil Johnson, on his visit to VNPF.
