Superannuation a success story in PNG, says Bakani

By MALUM NALU
SUPERANNUATION has become a real success story for the country with assets of more than K6.5 billion, according to Bank of PNG governor Loi Bakani.
Speaking at the launching of the automation of state’s superannuation contribution to Nambawan Super last Friday, Bakani said total assets of the superannuation industry had significantly increased from under K1 billion in 1999 to more than K6.5 billion now.
“The continued growth in superannuation and the positive results over the last few years speak for themselves when compared to the bad experiences some 10 years ago where contributors lost a lot of their savings,” Bakani said. 
“Superannuation is a unique financial product.
“It is the only form of compulsory savings where the government requires that employers must contribute 8.4% of the employee’s salary and the members must contribute 6% of their salary with the goal of ensuring that the members are able to have a comfortable income when they retire.”
Bakani said the automation of the state’s superannuation contribution was an outstanding achievement and congratulate the staff of the Departments of Treasu­ry, Finance, Personnel Management, and Nambawan Super Ltd who had worked hard to ensure that this automation project was a success.
“The automation of the state’s superannuation contribution will mean that approximately K10 million in combined employer and members contributions each fortnight (or K260 million each year) will be electronically deducted and transferred from the government payroll to the members accounts on a timely basis,” he said.
“These contributions can, therefore, be invested in a timely manner for the benefit of members.
“However, this will mean that the investment managers and the trustees would need to develop their processes to  that they can deal with the increased and timely receipt of members’ contributions.”
Bakani said one of the essential benefits of the automation of state’s superannuation contribution was enabling the state to be fully compliant to the Section 76 of the Superannuation (General Provision) Act 2000 and Section 5 of the Superannuation Regulation Act 2002 by enabling the state to make its full superannuation contributions in a timely manner as required by the act.
“From the regulators point of view, the introduction of anautomated system for the electronic transfer of the member and employer contributions for the 80,000 public servants who are contributing to the Nambawan Super Fund is to be commended,” he said.