BY ALEX DADAMU
PRIME Minister Manasseh Sogavare who is also the Minister of Finance and Treasury Acting has today officially announced a 6% crediting rate for Solomon Islands National Providence Fund (SINPF) members for the financial year ending 30th June 2021.
This announcement indicates an increase of 2.3% from the 3.7% crediting rate declared the last year 2020 for NPF members.
According to SINPF Chief Executive Officer and General Manager, Mike Wate when providing an overview of the funds financial and operational performance for the 12 months ending 30 June 2021, the fund has achieved a very strong above budget income for the year with an expected unaudited gross income of just over $400 Million.
Mr. Wate revealed that the strong drivers to this strong positive outcome are the following:
- NPF’s offshore equity investments through managed funds vanguard and UBS Australian Share Fund in USA, Europe, and Australia.
- Cash dividends from South Pacific Oil Limited, Solomon Telekom Company Limited, and Bank South Pacific Limited.
- Interest from NPF subsidiary companies Heritage Park Hotel Limited, Soltuna Ltd, Solomon Telekom Company Limited, and Solomon Housing Limited.
- Interest from NPF’s long-dated Government Development Bonds
- Commencement of rental for the recently completed refurbished Anthony Saru building, and
- Improved fair values of our key unlisted domestic equities South Pacific Oil Limited and Solomon Telekom Ltd.
The SINPF Chief Executive Officer (CEO) and General Manager further revealed that Total membership (with credit balance) increased to 144,198 members up from 143,950 recorded in the previous year. He said 5,967 new members were registered during the year, down from the previous year’s level of 6,182.
“Contributions received from employers and members increased to $344.2 Million up from $333.0 Million in 2020.
“Total member contributions balance, therefore, increased to $3.3 Billion from $3.1 Billion in 2020.
“Active contributing members slightly declined to 57,330 recorded in the previous year.
“Active members hold a total contribution balance of $2.6 billion,” Mr. Wate updated.
He admitted that the COVID-19 health crisis has severely impacted economic activity throughout the globe and in the Solomon Islands.
Meanwhile, SINPF Vice Chairperson, Mr. David Rupokets in his statement during the event to announce the NPF crediting rate for its members, said the board when considering the 2021 appropriate interest rate took into account the board’s crediting and reserving policies.
“The crediting policy requires the board to consider; 1) the investment return after deducting for all board and operational costs, 2) the board’s investment objective; 3) the reserving requirement of the fund; 4) the funds’ code of conduct and; 5) the minimum statutory 2.5% crediting rate as specified in section 8 of the NPF Act,” Mr. Rupokets outlined.
He in the meantime stressed that the risk arising from people not getting fully vaccinated to reach the Government targeted rate of 90% remains a dark cloud in the mind of the board as when a community transmission should occur, economic lockdowns and restrictions will be expected to be imposed.
