Govt owes K230m to Defence Force super

Business

By LEMACH LAVARI
The Government owes K230 million to the Defence Force retirement fund, according to the fund’s trustee.
Chief executive officer of Comrade Trustee Services Ltd John Auna told The National that the amount owed was from 2016 when the fund introduced its new accumulation scheme.
Before the change, the fund had the defined benefit pension (DBP).
This scheme did not require the Government to make employer contributions to the fund.
Auna said the new accumulation scheme is modeled similar to existing superannuation funds where the Government is required to pay an employer contribution.
He said 98 per cent of the fund’s members had chosen the new accumulation scheme while 2 per cent remained with the DBP scheme.
He said the amount owed was to those members in the accumulation scheme.
Auna said he was mindful of the current cash flow situation of Government and was having regular meetings to settle the payment.
“At the moment, when our members retire, they are only paid their contributions plus the fund’s investment returns,” he said.
“The State’s share will be paid when we receive the money.”
Auna said the amount would increase with the fund’s interest rates and was around K230 million.

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