Former NPF contributions unrecoverable

Members of the former National Provident Fund (NPF) will never recover monies lost following the bankruptcy of the fund in 2001.

National Superannuation Fund (NASFUND) CEO, Ian Tarutia, said the during Annual Regional Employer Conference yesterday in Port Moresby.

Tarutia said following severe financial losses by NASFUNDS predecessor NPF in the 1990’s member accounts had to be written-off. This meant that those funds were gone.

“You will remember that back in 2000, when the predecessor NPF, there was a commission of inquiry as a consequence of imbalance in the balance sheet, as  a consequence previously of poor decision making by former boards and former management, and there was a write-down.

“Members accounts had to be written off by 50 per cent, which accredit to about K30 million, employees had to pay an additional 2 per cent levy, and the state put in a K16 million rescue package.

“And the question that we keep getting asked is will we ever get that money back. Technically speaking, no, because once the write-down happened then that’s (money) gone.

He however informed members on the positives that have arisen out from that saga which has seen better control measures and oversight of NPF’s successor, NASFUND.

Over the last decade NASFUND has made K2.13 billion which has translated to an annual average crediting rate to members accounts of 11. 7 per cent.

NASFUNDS net assets has grown 15.5 per cent over the same period and now sits at K4.34 billion

“The positives as demonstrated here is that your fund sits there with good governance, good management, removal of political interference in the mamagenebt of superannuation funds. And also backed by new and good legislation. The results are there,” said Tarutia.

Following severe financial losses and allegations of corruption, fraud and mismanagement in the 1990’s, NPF was privatised and its assets divested to NASFUND.

A commission of inquiry was established in April 2001 to investigate all financial dealings undertaken by the NPF board and management.

The COI led by a former National and Supreme Court Judge, Tos Barnett, implicated NPF Chaiman, Jimmy Maladina, Legal Advisor, Herman Leahy,  and Treasurer, Peter O’Neill.

Maladina was cited for two alleged corrupt dealings: the Waigani Land Deal and the NPF Tower. Leahy and O’Neill were cited for their alleged involvement in the NPF Tower deal.

Maladina was referred to the police but fled to Australia. He would eventually return voluntarily and face the courts where he was found guilty and sentenced to eight years in jail. The custodial sentence was suspended by the courts.

O’Neill was also referred to the police and subsequently appeared before the committal court in 2005 for misappropriation. However, the charges were dropped due to insufficient evidence.

Author: 
Cedric Patjole