The Vanuatu National Provident Fund (VNPF) Board has approved partial withdrawals in members’ savings.
“The introduction of partial withdrawals specifically applies only on one ground, and that is withdrawal at the age of 55,” VNPF General Manager (GM), Parmod Achary conveyed in an exclusive interview with Vanuatu Nightly News’ Kizzy Kalsakau on Monday.
“Vanuatu does not have a pension scheme. My experience with Fiji is when members withdraw at the age of 55, they tend to use up all the money within the same year and end up with no money to support their future livelihood.”
He said it is imperative for the Fund to support its members during the working life, as well as after retirement when there is a need.
“We are trying to urge ni-Vans and our members to build a culture of savings, particularly at the age of 55. Our recent experience shows that about 77 or 87 police officers and a number of teachers retired,” said the VNPF GM.
“And they are willing, physically and mentally healthy to continue working. They can find other jobs and may want to retain their account. In this respect, what we do is when a member comes to withdraw his contribution, the VNPF officers will ask whether the member wants a partial or full withdrawal.
“If it is partial, then the Board will grant the management the mandate to process the partial withdrawal, any amount the member needs. The second withdrawal can be made after two years.”
He gave an example: “If you have Vt2 million in your account, you can withdraw Vt1 million and the balance can be withdrawn after two years. If you are still working, you can make another partial withdrawal after this period”.
This does not stop members from withdrawing the full amount, if they want to.
“If you want to make a full withdrawal, by all means do it,” said the VNPF GM. “The Act provides for that, it is your choice, we have just opened a ‘door’ to help members save money when they retire.”
The initiative is a Board decision, which was endorsed in January 21 this year. It will be effective this week.
“We will start immediately, either today or tomorrow,” said GM Achary. “We are more than willing to assist them, they should get their money within a day or two.
“My personal advice is members should take advantage of this. When you make a total withdrawal, even in the case of pensions your money is transferred to the pension account and there is no interest. In this case, the interest will be added to your last balance.”
The interest is calculated based on the last balance. So, if it is 2018 interest, it will be based on the end of 2017 balance.
“This is a win-win situation,” said the VNPF GM. “This is one unique thing that we have done for Vanuatu, it is not something that other provident funds do. But I hope members appreciate and utilise this.”