Solomon Islands National Provident Fund (SINPF) says that performance of investments can credit member contributions from 2.5% to whatever rate the Fund’s investments can deliver.
The Fund’s Deputy Manager Michael Wate made the clarification yesterday following a concern raised by a local man Hendry Kahui.
“Where was Hendry Kahui when the credit was 2.7% in 2009?” Mr Wate asked while adding that their returns fluctuate depending on a number of factors based on the circumstances on the investments and is also driven by how the local economy and the global economy is performing.
He added some investments in a year will perform poorly whilst others are performing well.
“For example, in a good year, like in the past we have 2 years of 18% in 2007 and 2008, 20% in 2013 and 15% in 2014,” he said. “In 2009, we had 2.7%, 5% in 2010, 8.75% in 2011, and 6% in 2012,” Wate further stated.
Mr Wate added the benefit as the NPF Act requires is when a member retires at the age of 50 years, the member will withdraw his contributions in a lump sum that he or she has accumulated together with all the interest that the Fund has credited to their accounts.
“Remember that interest on members’ contribution is compounding (benefit for members) but challenging for SINPF, as when the contributions grow bigger, we need to keep on investing to make money to continue to make good returns,” he said.
“Our investment objective therefore is ensuring that over time, we must deliver to our members crediting rates that are above inflation and grow their contributions,” he concluded his statement.
By AATAI JOHN