Gov’t wants early withdrawal from retirement funds

Members of the VNPF Board, Minister Koanapo and delegation from MoFEM during the visit. Photo: Kizzy Kalsakau

The incumbent Government wants to see members of the Vanuatu National Provident Fund (VNPF) withdraw their funds early instead of waiting until the standard retirement age, which is 55.

The Minister of Finance, Johnny Koanapo, conveyed this during his visit to VNPF.

Rather than waiting until they are old to claim their benefits, members should enjoy the fruits of their labour when still active, the minister stressed.

“The idea is to review the retirement benefit age where members can withdraw a certain percentage of their savings. Not 100% but let’s say anything between the range of 30% to 50%,” he said.

“The reason behind this concept is ensure that members can benefit from their savings when they are still productive. At the age of 60, most of us are no longer strong to do anything active and participate in the economy.”

The minister said he understands that members are already accessing their funds due to hardships created by the current COVID-19 situation and TC Harold but, this idea could be considered once the country’s economy recovered.

The minister responsible for VNPF said he is prepared to take this matter to parliament if it requires an amendment.

The General Manager (GM) of VNPF, Parmod Achary, said in a statement that VNPF welcomed the minister’s suggestion however, it will require legislative changes to the VNPF Act [CAP 189].

He said VNPF already has in place a system for partial withdrawals when members reach 55 years old.

“This is where members can withdraw a certain percentage of their savings and after a two-year hiatus, may withdraw again. This is similar to a pension policy and allows members to space access to their savings.

“The idea of retiring at 55 years is so that workers have sufficient funds to provide for their financial welfare once they cease to earn a steady income.

“Alternatively, and depending on each individual member, retiring earlier than expected allows for members to have more time to fulfill their dreams with their hard-earned savings.

“Further, they may also be in better health to carry out their retirement plans.”

“VNPF will continue to work closely with the Ministry of Finance and Economic Management on this proposal,” he assured.

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