Weekly Column

Joining VNPF - What does it cost?
Does it cost me anything to join the Fund?
Membership in VNPF is free of charge so no joining fee is imposed on members.
But does it cost me anything to have my money looked after by the Board?
Like you, the VNPF staffs have to be paid for their work, but their wages do not come out of your contributions. The Board invests your money wisely and securely, so it makes a profit. All administration costs come out of that profit.
Under the VNPF Act, if your annual contributions exceed Vatu 500, an amount of Vatu 640 will be deducted annually from your account as contribution towards Special Death benefit (SDB) scheme. (more details in our next issue)
How much will my contributions be?
Over the years, contribution rates changes as listed below:
1987 to 1999 – 6 percent (3 from employee / 3 from employer)
2000 - 8 percent (4 from employee / 4 from employer)
2001 to 2003 – 12 percent (6 from employee / 6 from employer)
2004 – 2012 – 8 percent (4 from employee / 4 from employer)
Can I contribute more or less than the amount stated in the VNPF Act?
The contributing rate when decided had to be a sum that was both affordable for all and enough to ensure a reasonable amount for members' future security. Therefore the VNPF Act fixed the rate of contribution. This means you cannot contribute lower than the fixed rate, however you may contribute higher if both employer and employee agrees to this.
The following forming part of your remuneration is not deductible or form part of your contribution to VNPF:
• Severance pay
• Gratuity
• Housing plus other allowances
If you are unsure about any other forms of payment that is or not deductible, please contact any VNPF office close to you.
If my spouse is employed, does our money go into a joint account?
When you join VNPF as a member, you are treated as an individual and have your own account number, so contributions by spouses are maintained in separate accounts. Unlike commercial banks there is no joint account.
If I get a retrospective wage rise, are my contributions adjusted accordingly?
Yes. In fact, whenever your wages change, for whatever reason, your employer calculates the contributions on the new total.
What do I get out of it?
Members are well rewarded. In addition to your contribution to the Fund, your employer also contributes on your behalf. Also, members earn interest on the contributions they make.
What interest do I earn on my money?
There is no set interest rate. This is because returns on investments vary. Every year, when the Board has assessed its profit, it decides on how much interest can be allotted to members.
How do I know how much interest I earn each year?
Every year statements of accounts are sent to you, which indicate the amount of interest that is credited for the year. For 2010 interest credited to members is 4.5% according to 2010 published annual report.
When do I receive the interest?
Although interest is credited to your account each year, it is not paid until such time as you claim a refund – such as when you retire.