MR. Rokovunisei, FNPF is a compulsory savings plan for the workers in Fiji. The main responsibility of FNPF is to ensure that the money is there when a worker retires. You have always said that Safety comes first. What is your strategy for the next three to four years to keep investing safely the funds that you are holding for the workers?
In our investment approval process, there are a number of criteria that we use; the first one is safety based on the ability to repay and appropriate security, the second is the return on the investment, the third one is liquidity and last, we can generally say contribution to economic and infrastructure development and employment. FNPF was set up in 1966 to provide an old age retirement scheme for workers by legislation, requiring all workers to be registered. It is a national scheme where the employers pay contributions monthly on behalf of their employees. So safety is very important as we look after other people's money until they retire. We started with 5¢ per dollar from the employer and 5¢ from the employee, then it went up to 6%, 7% and now it's 8%. The contributions come in every month and we keep updating the members' accounts until they retire when they are 55. When we started, we only had the lump sum scheme, but in 1975, we introduced a pension scheme, where members can withdraw as a lump sum or as a pension. Since the late 70s, we have also introduced schemes to assist members in housing, education, medical treatment overseas, funeral, and small business. But we have a reserving policy where one third of the balance must be left for retirement at the age of 55. Members can take up to two thirds of their balance for other benefits. Going back to your question on our investment strategy, we have strengthened the fund management structure to include a Management and Board Investment Committees that screen each investment proposal before going to the full Board for consideration. We also abide strictly by the trustee requirements in the Trustee Act and always aim for a unanimous decision at Board level. Our due diligence is done thoroughly in house and when necessary, we seek expert advice as required under the Act also. We act very quickly on defaulters and actively manage our equity portfolio. In summary, our strategy is to invest within the Trustee Act and increase our portfolio in growth assets both domestic and offshore for diversification and higher returns.


But increasing returns is another key objective of the company, what are the plans, following the Trustee Act, to increase the returns in the next 3 to 4 years?

Our new strategy now is to move towards increasing our growth assets by acquiring shares in profitable companies listed on the stock exchange and investing more in properties both here and abroad if necessary. A strategy we also adopted since 1998 is to invest offshore, for which we need the Reserve Bank Clearance. At the moment, there are just over F$200million invested overseas both in equity and term deposits. The reserve bank gives us an allocation every year, which was F$10 million this year. The new strategies aim to diversify in order to both increase returns and minimize risks. The message we get from Government is to invest more domestically and that is what we are trying to do while not deviating from our investment criteria I stated above. There appear to be many investment opportunities around but most will not qualify under our guidelines because of the Trustee requirements.

Besides investing safely, sound management of FNPF is, more than in any other institutions, a key aspect for the security of the people of Fiji. Would you say that FNPF is an example of an organization with sound management and how can you verify this?

We have been very proud of our performance in terms of our collection efficiency, cost control and processing of benefits. Collection efficiency is around 98.5%, total operating expenditure around 4% of contributions received and average processing period around 5 days. These are excellent results which we set as targets every year with a 5% improvement on the previous year until they become the "standard" when they cant be improved upon any more. Members can get their funds within a week and some like funeral assistance within 24 hours. Now we can deposit funds straight to the bank accounts when they request a lump sum. If they decide to take a pension, we send pensioners a cheque with six monthly vouchers, or we can send it directly to their bank account here or overseas. This is a service we provide very efficiently. Our target for cost control has been the 4% of the total contributions, which is a very low target at an international level. On our investments, our current return is matching the long-term bond rates within 5-6% but we make sure that we don't lose any of our initial investment. That is, no loss of assets. We ensure safety first before we invest and act quickly on defaulters. We use technology wherever we can so that there is minimum manual intervention in our procedures. This is what we mean by sound management; efficiency and effectiveness under strict cost control with no loss of assets.


FNPF has not suffered any losses in its investments. Taking into account that Fiji is a developing country and that it is not normal to achieve this in developing countries, how have you accomplished this?

We have been very fortunate to have a Board that has had no political interference in its investment decisions. I think that's the key. You will find that in a lot of countries where provident funds have failed, it is because of political interference. In the past, our Governments had left us alone and the public has appreciated it and has also left us alone except for some questions in Parliament, which we use as a feedback on our policies and our performance. We act on any comments or criticisms we face. We are left to make our own and recommendations based on our knowledge, skills and experience and the Board makes the decisions independently and with the best advice available. The Board has very experienced members who can make decisions independently and with wisdom. We also always strive to have unanimous decisions, otherwise we take back proposals to be refined and resubmitted. This way, whatever decision is made is made with the support of all the members: employers, employees and Government.


At the beginning of the interview, you said that safety comes first, then returns, and then liquidity and then you talked about economic development and infrastructure. Could you enlighten us a little bit on what has FNPF done for the economic and infrastructure development in Fiji?

The economic and infrastructure development of the country is part of the role of a provident fund in a developing country like Fiji as in other parts of the world. The development of the country and the capital market is in our interest. Anything that improves the standard of living in the country is also good for our members during their working life and in retirement. So indirectly we are investing in infrastructure for our members comfort apart from earning a return for them. We have been assisting the Government through development loans and securities, which in turn provide employment. On mortgages, we funded most of the hotels built in Fiji since 1968, two years after we started. We also invested in Semi-Government institutions for the provision of water, electricity and housing. Fiji would not be what it is today if it was not for the savings accumulated in FNPF which Government and businesses could borrow from to create economic activities and generate economic growth for the country and its people.

Which projects would serve as an example for foreign investors to change the perception on Fiji among the international business community? If foreign investors arrive into Fiji or start investing in Fiji, in what aspects, if any, could FNPF contribute?
We have funded many hotels and office complex built by companies with foreign investors through debt funding and they are now successful. The Sheraton Fiji and the ANZ House in central Suva are examples. Our contribution to those that want to invest here in the current environment will be in debt funding although we would also be interested in equity if allowed under the Trustee Act and the investment guidelines. The first requirement is compliance with the Trustee Act. But we are now examining ways in which we can participate in new projects through a private equity trust.


The business community in Fiji argues that FNPF should play a more active role in investing in Fiji. Only if Fiji institutions invest in Fiji then foreign investors will follow. How do you feel about this issue?

We have excess funds to invest but the investment has to meet our requirements. We are playing an active role given the constraints we operate in. We are contributing to economic activities in agriculture, housing, energy and businesses through wholesale funding to Fiji Development Bank, Housing Authority and Fiji Electricity Authority. We are looking at a number of proposals in fairly large hotel projects and we are likely to participate in one or two such projects. We would also look at funding Commercial Office Complex with a first mortgage as security again given the ability to repay and recover in the event of default. But we would not want to fund a project that will not be completed and be stuck with a property that cannot earn a return. In our overall investments, our best judges are our members. We collect our investment income and every 30th of June we distribute the income as an interest on their account. If we don't earn enough and the interest rate is low, they will start to ask for reasons.


... So if a foreign investor comes and invests in a project with FNPF they can be sure that it is going to be a safe investment…

… Safe in the sense that we have done all we can to ensure that, with compliance with the Trustee Act, the investment will earn a return until the initial investment is fully recovered. We haven't lost any of the funds we invested in the past. We may have lost some of the interest but the Trustee Act ensures that we invest in Government Securities, first mortgages or investments guaranteed by Government or a commercial bank, so at least we ensure the monies lent will come back. If a foreign investor invests in a project with FNPF, our strict guidelines will test all aspects of the project that may otherwise have been overlooked. Being a Trustee, we will ensure that a project is completed. That is why sometimes it takes us longer to make a decision. It is investing safely and prudently. It is still the responsibility of the investor to ensure that his interests are protected. But we will have the last call on the land and buildings, as we are required to invest in first mortgage only up to two thirds of its value. We normally would like to work with the investor to ensure the project is successful. Hence, to the best of our abilities, the project we participate in should be successful.


Having in mind the Trustee Act, what sectors would you recommend foreign investors to come to Fiji to invest?

We would now support growth industries like tourism and manufacturing, provided the security complies with our requirements. There are also I believe opportunities to invest in infrastructure such as power, airports and bridges which are in a way monopolies to the extent that it is costly to compete with.


In Tourism and Manufacturing, in what aspects would a foreign investor benefit by contacting the FNPF?

We cannot buy shares in an investor's company coming in for the first time. The only way we can participate is in the debt funding. We know that Tourism and manufacturing will be viable in the future because of our location and low cost of labor.


Regarding the National Budget 2003. In your opinion, how are the new measures and policies going to affect Fiji's financial systems in 2003 and the future of FNPF in particular?

We have always supported increases in public investments as it creates an opportunity for investments and create employment for our members. Anything that encourages investment is not only good for us but is also good for our members because if there is growth in the economy, the employers will employ more workers and more contributions will come in which we can again lend for investment.


You are a businessman in Fiji that travels abroad, when you go there, what is your impression about what people think about Fiji as an investment destination and how do you think that perception is going to change in the next three years?

Australians and New Zealanders know about Fiji but when I go to Europe, I find that not many people know about Fiji. The Fiji Visitors Bureau is doing a lot and they should go world wide instead of just focusing in Australia and New Zealand because people travel more around the world now. And as our growth industry is tourism, people should have more information. I think that people outside the Pacific haven't heard that much about the coups and about the cyclones and tourists keep coming. It sounds like the media exaggerates but people know this and in turn can decide weather to come or not. Fiji is a quiet and peaceful place, which is why hotel projects will be successful because nowadays people are searching for that kind of holidays.


Our readers always like to know more about who is behind a company, could you tell us more about your personal background?

I have a supporting family with my wife Siteri and four children, two boys and two girls. I started my career as a computer programmer. I was at Massey University in Palmerston North in New Zealand when the Fiji Government called me to join the Government EDP Center and go to Canberra for further training. I joined the civil service as a computer programmer and never went to Canberra. A few years later I joined NLTB in 1974 as its EDP Manager and in 1976 I joined the FNPF as a Systems Engineer. In 1981 I did part-time courses in USP graduating with the degree in Accounting in 1986 and then gradually moved to administration. In 1991 I was fortunate to be given an Australian Scholarship and graduated with an MBA in finance and got promoted to Deputy General Manager in 1993. I was appointed Chief Executive in June 2001. So my background was initially programming but I have always wanted to be in finance. The most important thing for me now is that I have reached the top of my career and must maintain the Fund's excellent achievements. I am fortunate to have a very experienced Board and Executive team to work with. I owe a lot for my success to Mr. Lionel Yee who was my boss for 25 years, previous Board Chairmen Hon Ratu Jone Kubuabola and Mr. Savenaca Narube for their encouragement and guidance and my family and the staff of FNPF for their support.