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The Coalition Government has ruled out reinstating Fiji National Provident Fund pensions backdated to 2012. It cited the decision as both unconstitutional and financially burdensome.

Cabinet made the decision after reviewing advice from the Ministry of Finance, the Fiji National Provident Fund and the Office of the Solicitor-General.

The advice examined the legal, financial and constitutional impact of reversing the 2012 pension cuts.

The reforms were introduced under the FNPF Act 2011 and the FNPF Transition Act 2011.

Independent assessments at the time found pension payments were higher than members’ actual savings.

The scheme was deemed unsustainable.

Younger and current members were subsidising higher payouts.

Government said restoring pensions to 2012 levels would weaken the Fund and threaten the savings of more than 430,000 active members.

The estimated cost of full reinstatement is $582 million.

This includes $372 million in back payments and $210 million in future liabilities.

Government said the Fund cannot absorb that cost without affecting member balances.

Funding it through the National Budget would strain taxpayers and public finances.

Cabinet also cited the 2013 Constitution of the Republic of Fiji. Section 173(3) prevents Parliament or Government from changing the legal effect of the 2012 reforms.

Government said it cannot undo past decisions or approve compensation linked to those reforms.

Section 26 protects property rights. Government said FNPF members’ savings are private property and cannot be used without consent.

However, pension rates have been restored going forward.

From 1 August 2024, affected pensioners began receiving reinstated payments.

The measure is funded by taxpayers at a cost of about $57 million.

Minister for Finance, Commerce and Business Development Esrom Immanuel said the government’s foremost responsibility was to keep pensions actuarially sound and sustainable.

He said the decision brings clarity and finality.

He said Government cannot and would not retrospectively reinstate FNPF pensions to 2012.

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