Monday 13 April, 2015

Savings are for retirement

Savings are for retirement

Your superannuation savings is for your retirement, if you don’t need it, leave it.

This was the message stressed by the Chief Executive Officer, Mr. Ian Tarutia during the Lae and Mt Hagen employer’s conference held recently.

Mr. Tarutia told the 162 employer representatives in Lae and 93 in Mt Hagen last week Thursday, that in the absence of a Government sponsored social security or unemployment welfare scheme, under the Superannuation Act (General Provisions) Act 2000, employee / employer contributions were purposely for providing contributing members a comfortable life in retirement or when they were no longer able to work.  “It is up to us to make it work through compulsory savings or through voluntary contributions to approved superannuation funds by employers and employees”.

Last year, total amount of payouts recorded K346.6 mill from 76,983 transactions across unemployment, retirement and housing advance categories allowed under the Act.

While the leading category was un-employment (full exit) where the Fund paid K161.85 mill to 21,090 members who left employment permanently, an additional K83 mill was paid in 52, 152 partial withdrawals to members who found themselves out of employment but who still were attempting to find further work. While we are cognizant of the economic realities faced our members, the high payouts at an early stage of a members active employment years are concern as we are not fulfilling the objective of long term savings.  

He said that Papua New Guinea was the only country in the world that enabled members to early access to their superannuation funds.

 “When you withdraw all your funds, you are quickly decreasing your life’s savings and may leave you with very little savings when you find yourself at a retirement age”, he said.

“Yes, it is your fund, but as the entity provisioned to promote a savings culture, we encourage members to think critically about the long term of your savings rather than worry about the short term benefits”, he said.

The fund has also identified and turned away applications of members who have been re-employed but still applying willing to withdraw their funds.

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