Fiji National Provident Fund
Asia and Pacific

A robust and sound mechanism for guiding the crediting rate determination

Implementation year

Each year in June (as required by law), the Board of the Fiji National Provident Fund (FNPF) makes two determinations:

  • Determining a crediting rate for the financial year just ended, which would adjust member balances accordingly on 30 June.
  • Determining a pro-rata crediting rate (or interim crediting rate), which will apply to full withdrawals during the financial year ahead.

A Distribution Policy was developed to guide the Board’s crediting rate determination process and which was built on the following principles:

  • The crediting rate should not place undue stress on the solvency requirement (the Board was legislated to keep at all times assets valued at 110 per cent of member liabilities).
    This places an upper bound on the crediting rate that can be determined.
  • The crediting rate cannot be negative, to protect the guarantee on member balances, but not set too conservatively. This places a lower bound on the crediting rate that can be determined.
  • As far as possible, stability in the crediting rate trajectory in consecutive financial years must be supported and that they are not seen to be volatile.
Governance and administration