Cabinet intervenes and delays SNPF new contributors loan policy scheme

 SNPF Chief Executive Officer (CEO) Faumuina Esther Lameko-Poutoa

By Lagi Keresoma

APIA: FRIDAY 16 JANUARY 2015: The Samoa National Provident Fund (SNPF) contributors are been given an option as to how they wish to offset their balances before the new policy change comes into effect 31 March 2015.

This is the latest twist to the new scheme introduced by SNPF early in the week that drew anger from contributors and strong words from the parliamentary Opposition party.

Contributors with loans above 45% of their contributions now have the option to use their contribution to offset the balance, if they wish to.

“For members with loan balances of more than 45%, an option would be considered to offset a portion of the loans against contributions to reduce it to 45%,” said SNPF Chief Executive Officer (CEO) Faumuina Esther Lameko-Poutoa.

This, she said will eliminate the negative entitlement situation when a contributor retires.

“This is optional and a one off transaction which will be treated as a partial withdrawal,” said Faumuina.

Contributors with interest in offsetting their balance from their contributions must also be aware that it will also “affect the interest and dividend on contributions.”

The new scheme which came into effect on Monday this week, reduced members loan entitlement from 50% to 45% of their contributions.

“This new policy was done in the hope of reducing loans and debt levels to ensure a more secure retirement benefits for its members,” says Faumuina.

However, Cabinet intervened and directed the management of SNPF to postpone the new scheme until 31st March 2015.

This was after a steady flow of complaints and accusations from the contributors.

The Opposition Tautua Party was critical pointing to the lack of consultation with members and that the Fund was ‘stealing’ the members’ money.

“They (SNPF) has no business to hold the contributors money,” was the common members outcry.

However, Faumuina explained during a press conference today that legally, the money belongs to SNPF, not the contributors.

“It only becomes the contributors’ money once they reach 55 years of age,” said Faumuina.

She acknowledges that there was much inconvenience caused by the change of which SNPF sincerely regrets.

The Fund assures the members will be well informed of the new change before it comes into effect at the end of March this year.