If there are valid reasons to replace the existing death benefit scheme, it would seem most sensible for the VNPF to self insure its members.
The VNPF needs to retain an actuary (a specialist whose business is to calculate the probability of events taking place) who would calculate the probability of the number of deaths of members occurring this year.
If each member’s account is debited, VT10,000 (as suggested) so the premium income is 660,000,000 Vatu then one takes 90% of that figure (to allow for costs and abnormal number of members deaths) and the VNPF will have 660,000,000 x 90% = 594,000,000 available to pay out.
One then divides VT594,000,000 by the number of members expected to die, this year as determined by the actuary.
If the result is an amount more than what management wishes to provide as a death payout, then the VNPF can reduce the premium paid.
This solution keeps the program “in house” and is fully funded by the VNPF, with no payment to outside parties.