Private Mail Bag, Suva. Telephone: Fax: Website: correspondence to be addressed to the General Manager & Chief Executive. UPDATE ON FNPF REFORMS & FY12 PERFORMANCE FIJI INSTITUTE OF BANKERS 6 MARCH, 2012

Private Mail Bag, Suva. Telephone: Fax: Website: correspondence to be addressed to the General Manager & Chief Executive. Welcome Introduction Major Activities FY2012 Financial Performance FY2012 Future Outlook FY2013 General discussions Agenda

Private Mail Bag, Suva. Telephone: Fax: Website: correspondence to be addressed to the General Manager & Chief Executive. FNPF was established 1966 Life Pension was introduced in 1975 Board decided to reform the Pension scheme in November, 2010, to ensure the sustainability of FNPF into the future Historical Background

Private Mail Bag, Suva. Telephone: Fax: Website: correspondence to be addressed to the General Manager & Chief Executive. Local – high liquidity (excess cash circulating in the financial system) Lack of investment opportunities FNPF started to implement Reforms to ensure sustainability & delivery of better services to our members Operating environment

Private Mail Bag, Suva. Telephone: Fax: Website: correspondence to be addressed to the General Manager & Chief Executive. Major activities for 2012 Implementation of the FNPF Decree Pension Reform Introduced 1 March, 2012 About 70% of pensioners joined the new scheme, reinvesting $168 million into the scheme 3000 pensioners were paid a lump sum of $127 million

Private Mail Bag, Suva. Telephone: Fax: Website: correspondence to be addressed to the General Manager & Chief Executive. Major activities for 2012 Separation of Business (international best practice) Separated Pension business from Contribution business by setting up the Retirement Income Fund (RIF) $252 million transferred to RIF to support pension business; including $84 million for top up pension & solvency Each business has its own solvency requirements (surplus assets to meet obligations)

Private Mail Bag, Suva. Telephone: Fax: Website: correspondence to be addressed to the General Manager & Chief Executive. Major activities for 2012 Solvency Requirement FNPF Decree requires FNPF to provide a solvency & funding certificate to RBF This has been met, indicating: i.FNPF has enough assets to meet its liabilities, even under negative circumstances ii.FNPF would not declare a negative interest to members

Private Mail Bag, Suva. Telephone: Fax: Website: correspondence to be addressed to the General Manager & Chief Executive. Member Assets vs Member Balances

Private Mail Bag, Suva. Telephone: Fax: Website: correspondence to be addressed to the General Manager & Chief Executive. FINANCIAL PERFOMANCE FY2012

Private Mail Bag, Suva. Telephone: Fax: Website: correspondence to be addressed to the General Manager & Chief Executive. Financial Performance

Private Mail Bag, Suva. Telephone: Fax: Website: correspondence to be addressed to the General Manager & Chief Executive. Financial Performance

Private Mail Bag, Suva. Telephone: Fax: Website: correspondence to be addressed to the General Manager & Chief Executive. Return on Investment

Private Mail Bag, Suva. Telephone: Fax: Website: correspondence to be addressed to the General Manager & Chief Executive. Investment Performance Why do we invest in Government securities? Safe Investment High returns to members Timely payments & never defaulted

Private Mail Bag, Suva. Telephone: Fax: Website: correspondence to be addressed to the General Manager & Chief Executive. Financial Performance Total Withdrawals & Expenses increased by $153 million Increase in member withdrawals by $135 million $127 million lump sum payment to pensioners who withdrew from the pension scheme Increase in housing, migration & two flood assistance to members Net surplus - $115.6 million

Private Mail Bag, Suva. Telephone: Fax: Website: correspondence to be addressed to the General Manager & Chief Executive. Income vs Expenses

Private Mail Bag, Suva. Telephone: Fax: Website: correspondence to be addressed to the General Manager & Chief Executive. Contribution vs Withdrawals

Private Mail Bag, Suva. Telephone: Fax: Website: correspondence to be addressed to the General Manager & Chief Executive. Other highlights Interest to Members – 5% ($133m distributed to members) Total membership grew by 4,645 to 372,831 Employer numbers increased by 340 to 7,840 Commencement of the re-development of the Grand Pacific Hotel Opening of new Namaka agency

Private Mail Bag, Suva. Telephone: Fax: Website: correspondence to be addressed to the General Manager & Chief Executive. Strengthened Governance Board appointment o Merit based, Relevant skills and experience Code of Conduct o Governs ethics and business dealings for Board & Management Supervisory Role of RBF o RBF role strengthened with new regulatory standards Appointment of Actuary o Actuary to value liabilities, assess solvency requirements & issue financial condition reports Improved Disclosure to Members o New opportunity for members to interact directly with Board

Private Mail Bag, Suva. Telephone: Fax: Website: correspondence to be addressed to the General Manager & Chief Executive. FUTURE OUTLOOK & KEY ACTIVITIES 2013

Private Mail Bag, Suva. Telephone: Fax: Website: correspondence to be addressed to the General Manager & Chief Executive. Outlook 2013 Focus on Creating Value for Members Improved Service Quality Improved & Sustained Return to Members

Private Mail Bag, Suva. Telephone: Fax: Website: correspondence to be addressed to the General Manager & Chief Executive Investment Investment Grand Pacific Hotel construction to be completed by end of 2013 Momi construction work will start next year Natadola subdivide & sell residential lots to recover our investment

Private Mail Bag, Suva. Telephone: Fax: Website: correspondence to be addressed to the General Manager & Chief Executive Members FNPF Decree Awareness Establishment of Two accounts for members Preserved – 70% of balance General – 30% of balance 1 st time property buyers to can access the Preserved Account, in addition to the General Account, to purchase/build their land/home

Private Mail Bag, Suva. Telephone: Fax: Website: correspondence to be addressed to the General Manager & Chief Executive Members For example If your current balance is $50,000 when the two accounts are established, then the following will apply. General Account - $15,000 (30% of $50,000) Preserved Account - $35,000 (70% of $50,000) If you will be purchasing your first property (land/house) then you will be eligible to access $25,500 ($15,000 + $10,500). $10,500 is 30% of $35,000).

Private Mail Bag, Suva. Telephone: Fax: Website: correspondence to be addressed to the General Manager & Chief Executive Members Voluntary Reduction in Age for Voluntary members from 16 to 6 year old Additional contribution to members accounts is now allowed to supplement the current 8% from members

Private Mail Bag, Suva. Telephone: Fax: Website: correspondence to be addressed to the General Manager & Chief Executive. Conclusion We will continue to build a strong foundation for the future of the Fund to:- FNPF’s in a stronger financial position after the Reform A surplus of $116 million was achieved even after a payout of $127 million to pensioners Create Value for our Members & Build Confidence in FNPF

Private Mail Bag, Suva. Telephone: Fax: Website: correspondence to be addressed to the General Manager & Chief Executive. Discussions