The record breaking interest rates of 18 percent announced recently by the National Provident Fund will be expected to make a big difference in the members' balance for the financial year.The unusually good year came about from various achievements especially on capital gains from NPF's share in NBSI to Bank of South Pacific, bad debts recovery, interest earned from Provincial and SOE loans and dividends received from Our Telekom Ltd.
The Manager Finance, John Veo Joi, gave the explanation when commenting on the unprecedented and record-breaking interest rate. Mr. Joi said that what members must understand is the gains NPF made are from transactions for the last five years. It was not until this year that we reaped the harvest.
When asked how the 18 percent could translate into members' balances, he said the interest rate will be calculated on members' contribution balances as of June 30th 2006 and will be added to 2007 contributions to show the new balance for financial year ending June 30th 2007. For example, for a balance of $10,000, a member would expect to see a payment of $1800 plus in its 2007 contributions, minus SBD fee of $5.
Depending on the NPF members' contribution balance on June 30th 2006, NPF members are expected to see a dramatic increase in their balance for the year ending June 30th 2007. The finance manager stated that members should see the interest paid into their account by end of the second week of July 2007. He said everything should be finalised before Saturday 14 July.