Private Mail Bag, Suva. Telephone: 330 7811. Fax: 330 7611. Website: www.myfnpf.com.fj All 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: 330 7811. Fax: 330 7611. Website: www.myfnpf.com.fj All 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: 330 7811. Fax: 330 7611. Website: www.myfnpf.com.fj All 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: 330 7811. Fax: 330 7611. Website: www.myfnpf.com.fj All 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: 330 7811. Fax: 330 7611. Website: www.myfnpf.com.fj All correspondence to be addressed to the General Manager & Chief Executive.

Major activities for 2012

• Implementation of the FNPF DecreePension 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: 330 7811. Fax: 330 7611. Website: www.myfnpf.com.fj All 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: 330 7811. Fax: 330 7611. Website: www.myfnpf.com.fj All correspondence to be addressed to the General Manager & Chief Executive.

Major activities for 2012Solvency 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: 330 7811. Fax: 330 7611. Website: www.myfnpf.com.fj All correspondence to be addressed to the General Manager & Chief Executive.

Member Assets vs Member Balances

Private Mail Bag, Suva. Telephone: 330 7811. Fax: 330 7611. Website: www.myfnpf.com.fj All correspondence to be addressed to the General Manager & Chief Executive.

FINANCIAL PERFOMANCEFY2012

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Financial Performance

Private Mail Bag, Suva. Telephone: 330 7811. Fax: 330 7611. Website: www.myfnpf.com.fj All correspondence to be addressed to the General Manager & Chief Executive.

Financial Performance

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Return on Investment

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Investment Performance

• Why do we invest in Government securities?

• Safe Investment• High returns to members• Timely payments & never defaulted

Private Mail Bag, Suva. Telephone: 330 7811. Fax: 330 7611. Website: www.myfnpf.com.fj All 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: 330 7811. Fax: 330 7611. Website: www.myfnpf.com.fj All correspondence to be addressed to the General Manager & Chief Executive.

Income vs Expenses

Private Mail Bag, Suva. Telephone: 330 7811. Fax: 330 7611. Website: www.myfnpf.com.fj All correspondence to be addressed to the General Manager & Chief Executive.

Contribution vs Withdrawals

Private Mail Bag, Suva. Telephone: 330 7811. Fax: 330 7611. Website: www.myfnpf.com.fj All 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: 330 7811. Fax: 330 7611. Website: www.myfnpf.com.fj All correspondence to be addressed to the General Manager & Chief Executive.

Strengthened Governance

• Board appointmentoMerit based, Relevant skills and experience

• Code of Conducto Governs ethics and business dealings for Board & Management

• Supervisory Role of RBFoRBF role strengthened with new regulatory standards

• Appointment of Actuaryo Actuary to value liabilities, assess solvency requirements & issue

financial condition reports

• Improved Disclosure to Memberso New opportunity for members to interact directly with Board

Private Mail Bag, Suva. Telephone: 330 7811. Fax: 330 7611. Website: www.myfnpf.com.fj All correspondence to be addressed to the General Manager & Chief Executive.

FUTURE OUTLOOK & KEY ACTIVITIES 2013

Private Mail Bag, Suva. Telephone: 330 7811. Fax: 330 7611. Website: www.myfnpf.com.fj All 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: 330 7811. Fax: 330 7611. Website: www.myfnpf.com.fj All correspondence to be addressed to the General Manager & Chief Executive.

2013 - Investment

Investment• Grand Pacific Hotel

construction to be completed by end of 2013

• Momi construction work will start next year

• Natadolasubdivide & sell residential lots to recover our investment

Private Mail Bag, Suva. Telephone: 330 7811. Fax: 330 7611. Website: www.myfnpf.com.fj All correspondence to be addressed to the General Manager & Chief Executive.

2013 - Members

FNPF Decree Awareness

Establishment of Two accounts for members • Preserved – 70% of balance• General – 30% of balance

• 1st 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: 330 7811. Fax: 330 7611. Website: www.myfnpf.com.fj All correspondence to be addressed to the General Manager & Chief Executive.

2013 - Members

For exampleIf 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: 330 7811. Fax: 330 7611. Website: www.myfnpf.com.fj All correspondence to be addressed to the General Manager & Chief Executive.

2013 - 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: 330 7811. Fax: 330 7611. Website: www.myfnpf.com.fj All 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: 330 7811. Fax: 330 7611. Website: www.myfnpf.com.fj All correspondence to be addressed to the General Manager & Chief Executive.

Discussions