January 23, 2012

Dr Wadan Narsey: FNPF Transition Decree: last nail in the FNPF coffin

The illegal President has signed the unlawful “Fiji National Provident Fund Transition Decree” which trashes lawful contracts between FNPF and pensioners, takes away their basic human rights to personal property, and removes their basic human right to take their just FNPF grievances to court (while it shamelessly claims that no one’s human rights are adversely affected by this Decree).

The FNPF Transition Decree claims in Part 2, that

“the principal object of this Part is to ensure that the arrangements for the provision of annuities by the Board are sustainable, non-discriminatory, and do not involve cross subsidy of one group (pensioners and annuitants) by another (FNPF members).”

Such phrases are also in the draft FNPF Act, and the drafters have no idea (or they don’t care) how internally inconsistent all these phrases are even within their Decrees (elaborated below).

The Decree makes a pathetic attempt to justify itself by referring to IMF, World Bank, ILO and “actuarial experts” who we know all recommended reductions of future annuities, but none recommended the breaking of lawful contracts and basic human rights to property nor of denying recourse to justice for existing pensioners. 

These agencies need to be publicly challenged as to whether they lend their support to this unlawful Decree which undermines laws of contracts and fundamental human rights of pensioners in Fiji.

The Decree has five Parts:

Part 2:  Terminates the current pensioners’ claims
Part 3:  Share investment scheme (not commented on here)
Part 4:  Protections  (what a farce).
Part 5:  Regulations (not commented here)

Part 2:  Trashing lawful contracts
Despite the FNPF CEO’s strange claim that pensioners do not have a “contract” but an “agreement”, the facts all suggest that pensioners do have lawful contracts approved by the elected Fiji Parliament:

I remind again, Article 4 of the FNPF Act states that the FNPF Board shall be a body corporate and shall, by the name of "The Fiji National Provident Fund Board", have perpetual succession and a common seal .... The Board may sue and be sued in its corporate name and may enter into contracts.

(a) the contracts were freely offered by a corporate body, FNPF, on the OP-9 form all of which were signed by pensioners and accepted by FNPF.

(b) On Form 9-OP, the FNPF informed the retiree that if he chooses to take the pension options, he will receive exactly this or that annuity (annual sum of money in dollars, and exactly this or that precise percentage of his final balance) payable for his lifetime (single pension) and the lifetime of his last surviving partner (in the case of the lower double pension). The FNPF warned pensioners “Once you have made your choice it is final and cannot afterwards be changed or revoked.”    The pensioners had entered a legal contract which could not be changed by them.

But the FNPF and the Military Regime clearly think that they can do whatever they want.

Part 4: Protections: Stealing pensioners’ lawful property
Article 17 of the Universal Declaration of Human Rights (UDHR) says “Everyone has the right to own property” and “no one shall be arbitrarily deprived of his property”. 

Have a laugh if you thought that Part 4  of the Transitional Decree titled “Protections” was about protecting you, the pensioners and your property.

Do you really believe Subsection 11 (2) of the Transition Decree which brazenly claims “the relevant provisions are not to be taken to provide for a deprivation of property of anyone”.   What a farce. 

By all relevant criteria, the current pensioners’ FNPF annuities are real financial property, guaranteed by a lawful contract guaranteed by elected Fiji parliaments.

Yet for virtually everyone currently receiving more than $300 per month, their entitlements are going to be drastically reduced – by between 30% and 54% of their lawful property. i.e.

The total loss to existing pensioners, in present value terms, will amount to more than $150 to $200 millions in aggregate (I roughly estimate).

Given that Australia and NZ do not recognize the Military Regime or its unlawful decrees, FNPF pensioners who are being adversely harmed might think about suing FNPF in Australia or NZ where FNPF has investments.

Part 4  “Protections”:  Denying Human Rights of Access to Justice
Clause 11 of the Regime’s Transition Decree shamelessly states the following, straight out of Animal Farm: (1) “The relevant provisions are not to be taken to be inconsistent with a human right or a similar right of any person”.  What a farce.

i.e. the Military Decree assures you, in legal gobble-de-gook, that your human rights are not being harmed.  What a farce.

Article 8 of the Universal Declaration of Human Rights (UDHR) states  “Everyone has the right to an effective remedy by the competent national tribunals for acts violating the fundamental rights granted him by the constitution or by law”.

Article 10 of the UDHR “Everyone is entitled in full equality to a fair and public hearing by an independent and impartial tribunal, in the determination of his rights and obligations...”.

But Subsection (3) of Part 4  of the Regime’s Transition Decree states:  “No court, tribunal, or other adjudicating body has jurisdiction or power to accept, hear, determine or in any other way entertain any challenge by any person, or to grant any remedy or relief to any person in respect of” (a and b) the validity of the Decree and (c) “any loss or damage suffered by any person...” as a result of the provisions in the Decree.

(4) states if there is any relevant claim before any court, “the presiding judicial officer, without hearing or in any way determining the proceeding of the application, shall immediately transfer the application to the Chief Registrar of the High Court for the termination of the proceeding or the application...” and “a certificate to that effect shall be issued by the Chief Registrar of the High Court”.

(5) states if any relevant proceeding has already been started but not determined, that proceeding is also terminated.

(6) in case some brave judge thinks otherwise, the Transition Decree sternly warns that any court that is currently hearing  such a proceeding, “must, on application by the Attorney-General ... issue a certificate to the effect that the proceedings .... have been wholly terminated..”.

And under (7) Such terminating certificates cannot be challenged in court.

Bottom line:  the judiciary will not be allowed to hear your case, even though it involves a lawful legal contract entered into between FNPF and pensioners (backed by elected Fiji Parliaments), your basic human right to personal property, and your human right to go to court with your just grievances.

Tough luck for the Burness/Shameem case, eh?

The very fact that this Military Decree stops all legal challenges is clear evidence that the Regime knows that the FNPF case will not stand up in court.

Why else would they have Part 4 in this Decree, alleging “Protections” – yeah, protection of the Military Regime against legal action.

So much for the separation of the judiciary from the State.

Part 2 of Decree:  False claim Number 1 
Part 2 of the FNPF Transition Decree claims that the lumps sums the pensioners left in the Fund and the investment income thereupon (allegedly amounting to $310 million), cannot meet the present value of the future liabilities owed to current pensioners ($565 million). 

This statement totally ignores that

(a) there was a Pension Buffer Fund specifically set up for this very purpose by the Fiji Parliament;

(b) that Pension Buffer Fund (which had lump sums paid into it and pensions paid out) was not credited with the interest which it was entitled to,

(c) that this Pension Buffer Fund would have accumulated to more than $850 million by now- ie $300 millions more than the $565 million that is admitted (for the first time), to be the present value of liabilities to current pensioners.

Part 2 of Decree:  False Claim 2:  the Board will be non-discriminatory. 
Part 2 of the Transition Decree claims that the FNPF Board will be “non-discriminatory”.

Yet Clause 8 (titled “Top ups”) is all about arbitrarily discriminating between different classes of retirees- whether they are currently receiving less than $100 per month, receiving between $100 ands $300 per month, and more than $300 per month.

Subsection 8 (2) states that for those pensioners currently receiving less than $100 per month, and who wish to convert their lump sum to the new annuities offered which will of course be less than $100 per month,  the Board will arbitrarily offer $100 per month.

i.e the FNPF now will become a welfare organization, (with whose permission?) subsidizing current low annuity pensioners at other pensioners’ expense.  So cross-subsidization will continue, whatever the Decree claims.

I will also bet you, that the over-paid drafters of this Military Decree have never thought about those retirees who might currently have an annuity less than $100 per month, only because they took a partial lump sum upon retirement.

Subsection 8 (3) states that if any pensioners are currently receiving more than $100 (bad drafting- it should really be stating that if a pensioner is receiving between $100 and $300 per month) and they leave all their lump sum entitlement with the Fund and take the new annuities being offered, then they will receive either their current annuity or $300, whichever is the lesser.

i.e. those pensioners currently receiving between $100 per month and $300 per month will be left alone.

Subsection 8 (4) then states amazingly, that if you  are currently receiving more than $300, ands leave all your lump sum entitlement with FNPF and take the new annuity rates that apply to you, then you will arbitrarily have your lump sum increased by $10,000 or 25% of your existing lump sum, whichever is less.

Why are they giving this small “bonus” lump sum option rather than just raising the annuity rates?  Because they want future retirees to receive the lower annuities.

They will give a small lolly to existing pensioners, whose contracts they know they are breaking.

So for any particular retirement age in the past, pensioners will lose a higher proportion of their annuity, the higher was the lump sum they left in the Fund:  i.e. the more you trusted the Fund, the bigger is the percentage you will be losing. 

For a lump sum of $100,000 you will lose 36% if you have just retired, the loss increasing to 50% if you are age 66,  and then decreasing to 46% if you are about 72 years old now.

How astonishing for a Decree that claims that the FNPF will be non-discriminating!

This Transition Decree, contrary to its claims, is discriminating between all kinds of retirees, discriminating by age and by lump sum originally left in the Fund.

The Military Regime and the FNPF Board have set themselves up as redistributing agencies between pensioners or all kinds.

And how do they intend to make sure that future pensioners and future contributors are not discriminated between?

Aaaah. You do not need to be an Albert Einstein to figure this out, do you?  Just as they allegedly eliminated discrimination between past pensioners and current contributors.

What of the future?
Many current and future pensioners are asking what they should do

Should they take the lump sum being offered, or the new annuity rates?

Sorry, but all current and future pensioners have to answer this question themselves.

But there is a quiz in the previous article which current pensioners can rack their delicate or tired brains over, if that’s any help.

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