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Fiji: New rule creates thousands of retirees

A recent government decree in Fiji orders all civil servants 55 years and older must retire Thursday, April 30. The new rules affect any person working within Fiji’s government, police force and prisons service. Previously, those workers would be employed until turning 60.

The mandate excludes the commissioner of Fiji’s police or prisons or the head of Fiji’s military.

Debate continues on the total number of forced retirees who will leave the workforce on the last day of April. Fiji’s Public Service Commission permanent secretary told the media more than 1600 civil servants will be affected, including 15 doctors, 97 nurses and more than 800 teachers. One blog calculates perhaps 2200 government workers could be out of work.

In order to continue necessary services, the government will allow workers with “scarce skills” to be eligible for re-employment on 12-month contracts. Those professions include doctors, nurses, teachers, engineers and other technical officers.

A post at Coup Four And A Half, the blog providing the 2200 statistic, reports that the influx of recent retirees could provide liquidity issues for the country’s retirement financial plan, Fiji National Provident Fund.

With the deteriorating economy and rising inflation due to devaluation, it's expected that most of those retiring will want to withdraw their money all at once, instead of taking the pension scheme under which the calculated percentage of their funds is paid out once a month.

The interim regime has publicly stated that all those retiring at the age of 55 should depend on their FNPF savings to sustain them for the rest of their life and cater for the needs of their families.

Sources say it will be interesting to see whether the FNPF allows members to take their money out in a lump-sum.

Raw Fiji News also predicts most retirees will take their money out immediately. The fund’s manager affirmed all retirees will be paid according to their pension options.

The new retirement regulations arrive when Fiji’s economy is under strain. It has been hit by the global economic slowdown, hurting the tourist and agriculture industries; the recent devaluation of its currency by 20 percent has raised fears of inflation. On top of that, Moody’s Investor Services downgraded the country’s credit ratings by two notches because of “political instability.”

The Intillentsiya blog argues Fiji’s taxpayers will eventually foot the bill for the mass retirements.

Eradicating all those over 55 (with the privileged exceptions of Bainimarama & Teleni) from the face of the civil service is just irrational. Especially as we all know there are no set internal means in existence within the civil service to capture their institutional knowledge of where things are at, upon their departure. It is simply impossible to capture it all within a span of day’s (there are some reports of instant departures) whereas normally institutional knowledge is embedded into organizational procedures and structures. The fact that there will be a helluva lot of extra workloads thrown upon the remaining civil servants to deal with is almost guaranteeing worse off service outcomes to taxpayers. In effect the taxpayers once again bear the brunt of this flawed and illegal decree…

The economic fall0ut of this flawed policy and illegal decree will be severe. Assuming that these 1,000 or so over-55er’s were on a conservatively estimated salary of FJD$30K that essentially boils down to savings of about $30mill from now on. Which is dandy for Bainimarama’s continued illegal empire building.
However the other end of the spectrum also means that there is a $30mill LESS floating actively within the economy (goods, services) and it will fall upon the illegal regime to somehow subsidize normal government mandated services.
It also means there’s less taxes for collection and therefore even less income for custodians of our national coffers at FIRCA to depend on for next year’s budget.
The superannuation custodians FNPF can also expect similar trends.

The retirement regulations are problematic to a few bloggers who point out that Royal Fiji Military Force commander Bainimarama, who turned 55 April 27, has been excluded from them. Tim Selwyn, in a post at the New Zealand-based Tumeke blog, says the forced retirements will allow the government to do away with troublesome army officers.

It is no coincidence that Bainimarama turns 55 on 27 April and that he can force any state employee to retire that is 55 just three days later. It may be utter hypocrisy, but it is also a classic Alpha Male move to eliminate the senior ranking rival males – the MO of the bully/thug military man.

The retirement exemptions are the means the military will use to sack the good sorts of government officials that resist – in any way – the “new legal order.” The sorts of people that refused to obey the Commodore the first time around in 2006 and who continued to operate their departments without reference to what they knew was an illegal authority. He had to send troops into some of these offices because the senior civil servants refused to acknowledge the legitimacy of his regime – and the Appeal Court upheld that Bainimarama's government was and is illegal. These are good people with a genuine ethic of maintaining a first class neutral public service. These people will be forced to retire and the Commodore can move his military men and other pro-regime supporters in – regardless of merit and competence and with no mind for the rule of law.

Earlier this year, Commodore Frank Bainimarama’s interim government fought and won a case against two public sector unions allowing it to reduce the civil servant retirement age from 60 years to 55. A few weeks later, the Supreme Court allowed the two unions to appeal the case, granting a stay in the new rules.

The stay was nullified after the country’s president, reacting to a court case questioning the legality of the Bainimarama government, abrogated the constitution, fired the entire judiciary and made himself head-of-state. He then reappointed the Bainimarama government to a five-year mandate.

During the retirement case, the Bainimarama government argued the 55 year rule will free needed cash for the government, allow older civil servants to enter the private sector with new businesses and, more importantly, permit Fiji’s bulging young population a place in the workforce. One analysis showed that Fiji’s private sector has only been able to handle one-half of the new job seekers each year.

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