By Gary Hatigeva
THE YouSAVE Scheme and the proposed increase in the amount of contributions to Special Death Benefit (SDB) Scheme have been legally adopted under the Solomon Islands National Provident Fund Amendment Act 2018, after it made a smooth passage in parliament on Thursday.
After it was put down for debate, the Bill witnessed a lot of support from members of both sides of the house, many of which who spoke positively about the changes made to the current NPF Act, and commended the government for coming up with these important amendments.
Others have also described it to be a belonging to the people, which will directly have positive impacts on the livelihoods of the mass population, a group that many suggested to have been forgotten or left out by the major commercial financial systems and operations within the country.
NPF was usually referred to as a corporate entity of the government established to serve only those in the urban centres, mostly in Honiara, but with the new addition to its feature in the Amendment Act, the Fund now covers all, but was only advised to create mechanisms for a better access to those intended for by some of the changes included.
Submitted as the Solomon Islands National Provident Fund (Amendment) Bill 2018, the bill allows those in the informal employment to also save for retirement.
This saving scheme is called the YouSAVE and the bill’s passage now gives legal mandatory status to the scheme, which has been rolled out into the provinces as part of its trial phase carried out by the Fund and its stakeholders.
This new scheme is anticipated to improve the financial inclusion of pension savings in Solomon Islands and is supported by the Pacific Financial Inclusion Programme.
Other amendments are also made to bolster the financial stability of the Special Death Benefit (SBD) entitlement to NPF members.
Currently the special death benefit yearly premium has not been updated in over 40 years and is currently set too low for the Solomon Islands National Provident Fund to provide an appropriate Special Death Benefit to its members.
The amendments will update the special death benefit premium and other monetary amounts specified in the Act that have been eroded by inflation over the last 40 years which no longer appropriately reflect an appropriate monetary amount.
This was something that went down well with all members who contributed in general principle debate of the Bill, but an overwhelming suggestion from most for the Fund’s management to have the SDB accessible by families and relatives of members when they pass away.
Highlighting this, Member of Parliament for East Makira, Alfred Giro said this special benefit fund should be released when members pass away, and not wait for it to be included in the whole payout of members’ formal contributions, so to help family facilitate funeral and death related matters
He pointed out that facilitating death related activities is an expensive norm and this SDB will lighten the pressure on families of those NPF members who may have passed.
He stressed that with the many cultures there are in Solomon Islands, death is one untimely event that includes a lot of activities, many of which will include money.
These amendments have also included change in the timing for the declaration of the yearly interest to be credited to member’s accounts.
The amendments will change the timing from the end of the financial year which is in June, to three months after the end of the financial year which is the end of September.
This will allow the SINPF to make the decision of how much interest to credit to members’ accounts based on audited financial accounts, rather than on unaudited accounts that could change.
The amendments according to Members are simple and are responding to the need to ensure NPF remains vibrant, and can offer its services and benefits to a wider section of Solomon Islanders.
Parliament was later adjourned on Thursday after deliberating on the NPF Amendment Act, and is expected to resume around 9:00am this morning, but will likely be adjourned again for Monday, November 5, 2018.