Financial assistance for super fund members

Members of Authorized Superannuation Funds (ASFs) of PNG will be entitled to a tax-free one-off payment of 20% if they lose jobs as a direct result of COVID-19.

The proposed assistance was announced on Tuesday by the ASFs namely, National Superannuation Fund (NASFUND), Nambawan Super, Comrade Trustee Services (CTSL), and Aon Master Trust (AOM).

This follows consultation with Bank of PNG to support the Government’s announcement to enable financial assistance for affected members.

In a joint statement, the ASF’s announced the relief measure for members in the wake of the COVID-19 pandemic.

The proposed assistance is a tax-free one-off payment of up to 20% of members contributions up to K10, 000 whose employment is terminated as a direct result of COVID-19.

This will become effective as soon as legislative amendments to the Superannuation General Provisions Act are approved.

The ASFs anticipate that job losses as a result of the virus will result in benefit payments of more than K500 million in 2020, in addition to paid unemployment and housing advance benefits .

This includes members who may opt for retirement as employers address the COVID-19 impacts. It is expected that whilst some members will look to use these benefits in their Retirement Savings Account, some will choose to invest in their families, or start up SMEs, all of which will help stimulate economic activity and increase taxation received by the State.

The ASFs remind members that under the Superannuation Act, a member who remains unemployed after 3 months, will be eligible to receive a monthly payment equivalent to 50% of their last monthly salary.

The ASFs have also announced that:

·       All pension payments currently being made will continue to be made to the beneficiaries in line with the ASFs pension obligations.

·       They will continue to support the State through investments in Treasury Bills and Government Inscribed Stock after paying superannuation entitlements to affected members. The total invested by ASFs to date is over K5 billion and any additional investments will always be considered by the Trustee around the member’s best interest.

·       ASFs have investments in many businesses that operate across a number of key sectors within the economy that employ thousands of Papua New Guinean workers. The ASFs are working closely with these businesses to ensure disruption to business operations and employment impacts are minimized as much as possible. In this way the business are continuing to support the economy and to keep people employed. As a shareholder in these businesses, ASFs are mindful that COVID-19 may cause a negative impact on their operations which may lead to these investment companies requesting cash support from ASFs. The ASFs will be closely managing liquidity to ensure both members and investments are supported as much as possible during these challenging times.

·       Distressed employers who are unable to pay contributions during this time, are to contact their respective Fund as soon as possible. The ASFs believe it is in the best interest of the country for as many businesses as possible to remain open, employing people and offering goods and services that are needed in the community.

The monthly inflow of contributions is of critical importance to the Superfunds as a course of liquidity to pay for retirements and for investments. The ASF’s will work with employers on a case by case basis to come up with suitable arrangements to assist employers with their payment capability, including in some justified cases deferment of contribution payment.

·       Where there has been genuine engagement with the ASFs, individual Funds will waive aside penalty interest on late payments from employers whose operations and business activities are affected by COVID-19.

·       As landlords of many large commercial properties, ASFs will offer concessions on rental payments that will be afforded to tenants whose businesses will be directly impacted by COVID-19. Tenants who may have difficulty with rental payments are asked to work in partnership with the Funds as soon as practical to consider their payment arrangements.

The ASFs reassures members, that their Funds are safe, secure and available to them as and when they are entitled to their retirement benefits.

The ASFs added it will provide assistance to its members and employers as outlined above and will work with Government to implement its Economic Stimulus Package.


Press Release