APART from the traditional pension or superannuation funds in PNG, the Government needs to establish other types of “managed funds” with specific benefits products to cater for the overall needs of the majority of income-earners in the country.
We need other alternative investment choices other than just putting our hard-earned savings in the banks and getting only a “pittance” for it.
While most superfunds have grown over the years due to increase in membership, fundamentally they have not changed much since their establishment.
Any new fund must extend the related benefits not only to members, but to their spouses, children and immediate family members.
Most managed funds are set up for a single purpose and they generally provide for future needs.
They include simple old savings scheme to give workers some security at retirement and in old-age.
In other words, it is a life-long financial plan for its member – an investment vehicle for personal financial planning.
This is good for the average worker who might otherwise not have the means available for a planned retirement.
In designing any future “managed funds”, the Government must ensure that some in-built hedging mechanism is incorporated to guard against two factors – inflation and increasing life-expectancy.
I urge the Government to introduce a nationwide fund for all categories of workers and their families to include such benefits:
l Savings to buy a home;
l Pay medical bills;
l Children’s tertiary education;
l Invest in shares; and
l Premium for personal and home insurance.
The new products must also cover a wide range of financial instruments from property, insurance to stocks and unit trusts.
So upon retirement, the worker will have a sizeable “nest-egg” to see them through in retirement years.
We must further encourage long-term financial planning among our people.
I see a future challenge for the Government and all future managed funds “trustees” to consider innovative, yet conservative savings and investment strategies of allowing our workers to intelligently use their managed funds to meet their expectations in future years.