I look back over the last 20 years of Nasfund’s journey as a new organization under the Mekere Moruata Government’s Year 2000 Financial Sector Reform and am proud of where Nasfund is today and where it is heading into the future. National Superannuation Fund or Nasfund for short was formerly the National Provident Fund of Papua New Guinea (NPF) and was actually established in 1981 to provide social security benefits for private sector employees, who until then, did not have the benefit that public servants enjoyed as members of the Public Officers Superannuation Fund (POSF). So Nasfund and its predecessor NPF is technically 41 years old as an organization.
To reflect on where Nasfund is today, we need to appreciate where it came from 20 years ago.
In 2000 a Commission of Inquiry into the affairs of Nasfund’s predecessor, National Provident Fund revealed a number of deficiencies, irregularities caused by political interference, a lack of proper governance, maladministration and corruption. There was no focus on serving and promoting members interest which was the sole reason NPF was established in the first place. As a result of this, NPF was financially in a bad state. Its Board and management then had borrowed excessively to fund high risk speculative investments that did not deliver returns. At the same time member administration record keeping was based on an antiquated MIS platform with no real time transaction process which meant inaccurate record keeping of member accounts. The Fund was bleeding and members were facing a write down of their savings by almost 50%.
Two interventions were introduced by the Morauta Government to address this.
Firstly, a rescue package to avert a 50% write down was put together and enabled in law through the passing of the National Provident Fund (NPF) Financial Reconstruction Act 2000. Secondly the passing of the Superannuation General Provisions Act 2000 which unified all super funds under one legislation. The hall marks of this new superannuation act was strengthening governance which entailed the removal of political influence in the appointment of Board directors and CEOs, appointment of Bank of PNG as regulator, outsourcing of key functions, investment and fund administration to independent licensed service providers. Additionally, directors and management were required to pass fit and proper requirements.
With a new legislative framework in place, a new Board under the control of private sector employee and employer groups and led by John Jeffery of the Employers Federation was put in place followed by a new management led by Australian, Rod Mitchell. Thus the work of rehabilitating and rebuilding the Fund began.
I was honored to have been part of the new leadership team since 2002. With a renewed focus on placing members first, instituting a strong corporate governance culture within the Fund and being transparent and accountable in all our activities, a number of milestones were achieved.
Debt was repaid, audited accounts were signed in February each year, attainment of year on year profitability, interest paid to members, highest being 37%, membership grew, employer base grew, a savings & loan society established for members, balance sheet grew, increased branch network around the country and development of a skilled and qualified Papua New Guinean workforce. Our investment activities have not only delivered returns to members savings but it has contributed to nation building through job creation, tax revenue and strengthening our economy.
We were the first to bring transformational change that is today industry standards. For instance introducing SMS texting of member balances on mobile phones, savings & loan facilities for non-superannuation financial services are now emulated by other funds. The rest as they say is history.
For me personally, being involved in bringing about change from the shop floor to the board room in delivering service to members and making a small difference in their lives has been a truly gratifying experience. There is always room for improvement in what we do within the confines of the Superannuation Act and this is always a motivating driver. Members today are well informed. Apart from watching their super grow, they are taking a keener interest in how the Fund performs.
I remain convinced the formula for success in public institutions is the path Nasfund and the superannuation industry for that matter has taken. That is a people first mindset, political will for positive change, removal of political interference and a strong governance culture. Everything else will naturally fall in place.
Today I am proud to say Nasfund is a strong, well governed, well regulated institution. It enjoys a high profile in the business and international community and has the support and confidence of its members.
A number of our staff have been with the Fund for more than three decades and have contributed to Nasfund’s growth and successes. I acknowledge and thank them for the dedication, commitment and loyalty to the Fund and its members. It is their initial hard work in the trenches that has helped shaped the organization to where it is today.
As we acknowledge 20 years of Nasfunds existence and reflect on its successes we also take the time to assess our shortcomings and how we can improve. I believe there is so much more Nasfund can do to improve quality of life for members and certainly towards the socio economic development of Papua New Guinea.
20 years has gone but it is the next 20 years that I look forward to and the next generation of Fund leaders to make it happen for the betterment of members and Papua New Guinea.
Ian A. Tarutia OBE
Chief Executive Officer