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The Authorized Superannuation Funds (ASFs) of Papua New Guinea, namely National Superannuation Fund Ltd (NASFUND), Nambawan Super Ltd (Nambawan Super) and Comrade Trustee Services Ltd, (CTSL) and Aon Master Trust (AMT) in consultation with Bank of PNG support the Government’s announcement to enable financial assistance for affected members who lose their employment directly due to COVID-19.
Relief to Members
The proposed assistance: Members whose employment is terminated by their employer due to business downturn as a direct result of Covid-19 will be entitled to a one off payment of 20% of the members own contribution up to a maximum of K10,000. This amount would be tax free to the member.
This will become effective as soon as the appropriate legislative amendment to the Superannuation General Provisions Act is approved by Parliament. This is work in progress.
If the member remains unemployed after 3 months, they will be eligible to receive a monthly unemployment payment equivalent to 50% of their last monthly salary which is already provided for under the Superannuation General Provisions Act.
The ASFs anticipate that job losses as a result of COVID-19 will result in benefit payments of more than K500 million over the course of 2020, in addition to what is already paid in normal unemployment and housing advance benefits. This also includes members who may opt for retirement as employers address the COVID-19 impacts. It is expected that whilst some members will look to utilize these benefits in their Retirement Savings Account, some members will choose to invest in their families, whilst some may start up SMEs, all of which will help stimulate economic activity as well as increase the level of taxation received by the State.
Guarantee on Pension payments
The ASFs guarantee that all pension payments currently being made will continue to be made to the beneficiaries in line with the ASFs pension obligations.
Investments in Treasury Bills and Government Bonds
The ASFs will continue to support the State through investments in Treasury Bills and Government Inscribed Stock after paying superannuation entitlements to affected members. The total invested by ASFs to date is over K5 billion. It should be recognized that any additional investments will always be considered by the Trustee around the member’s best interest.
Investments in Business
ASFs have investments in many businesses that operate across a number of key sectors within the economy that employ thousands of Papua New Guinean workers. The ASFs are working closely with these businesses to ensure disruption to business operations and employment impacts are minimized as much as possible. In this way the business are continuing to support the economy and to keep people employed.
As a shareholder in these businesses, ASFs are mindful that COVID 19 may cause a negative impact on their operations which may lead to these investment companies requesting cash support from the Funds. The ASFs will be closely managing liquidity to ensure both members and investments are supported as much as possible during these challenging times.
Monthly Contributions from Employers
Distressed employers who are unable to pay contributions during this time, are to contact their respective Fund as soon as possible. The ASFs believe it is in the best interest of the country for as many businesses as possible to remain open, employing people and offering goods and services that are needed in the community.
The monthly inflow of contributions is of critical importance to the Superfunds as a course of liquidity to pay for retirements and for investments. The ASF’s will work with employers on a case by case basis to come up with suitable arrangements to assist employers with their payment capability, including in some justified cases deferment of contribution payment.
Penalty Interest waived for late Contribution Payments
Where there has been genuine engagement with the ASFs, individual Funds will waive aside penalty interest on late payments from employers whose operations and business activities are affected by COVID 19.
As landlords of many large commercial properties, ASFs will offer concessions on rental payments that will be afforded to tenants whose businesses will be directly impacted by COVID19. Tenants who may have difficulty with rental payments are asked to work in partnership with the Funds as soon as practical to consider their payment arrangements.
Assurance to Members
The Board and management of the ASFs want to assure their respective members, that their Funds are safe, secure and available to them as and when they are entitled to their retirement benefits, under its governing legislation, the Superannuation (General Provisions) Act.
However, COVID19 has disrupted the way we live and do business, and accordingly the ASFs will provide assistance to its members and employers as outlined above and will work with Government to implement its Economic Stimulus Package for the betterment of our members and our country, Papua New Guinea. The above supportive actions of Government efforts to mitigate against the impacts of Covid-19 are subject to the Bank of PNG concurrence and is always subject to our overwhelming responsibility as Trustees of our members superannuation retirement savings to act in the members’ best interests.
Charles Vee – Chairman NASFUND
John Beattie – Chairman AMT
Sitiveni Weleilakeba – Statutory Manager CTSL
Anthony Smaré – Chairman Nambawan Super