THE Bank of Papua New Guinea is supporting the proposal by Nambawan Super Ltd (NSL) to review the Superannuation General Act 2000, the umbrella legislation covering the operations of all super funds in
According to NSL managing director Leon Buskens, a task force was established to review the SGPA legislation introduced by the Mekere government more than 10 years ago.
“Nambawan Super is in the forefront of lobbying to enact key changes to the act to improve operational arrangements aiming to achieve more benefits for members, especially in light of the economic boom expected from the LNG project,” Buskens said in a statement yesterday.
He said the Bank of PNG had indicated its support for the proposal to set up a task force committee to review the act.
“Nambawan Super’s board and management are in regular contact with the industry regulator (Bank of PNG) as well as the government and other industry participants.
“Last year, we wrote to the regulator proposing a comprehensive review of the Superannuation Act.
“We are pleased to report that the bank has been receptive to this and will present the proposal to the minister for finance and treasury,” Buskens said.
Nambawan Super had proposed changes on its services to include contribution rates, life and medical insurance, payments on compassionate ground, family super, housing withdrawals, extending the super net and RSA limited increase.
It had proposed increasing compulsory contribution rates by 2%, which would move the current employee portion of 6% to 8% and the employer portion from 8.4% to 10.4%.
NSL also proposed to fund members’ life insurance premiums from its profits by election by each member and with extra contributions by them and would recommend to consider the position if compulsory contribution rates were increased.
It also advocated amending the legislation to allow the trustee to be able to make payments to a member on compassionate grounds, such as where the member’s immediate family is critically ill and life can be prolonged with medical treatment.
It was also in favour of introducing a new product to allow fund members to have sub-accounts for their family members. These accounts would be set up on voluntary contributions.
“A culture of savings in our society will also be promoted here,” Buskens said.
“For housing withdrawals, NSL considers putting in place a formula that allows the member to use part of his or her employer contributions for this important purpose.
“In extending the super net, NSL has proposed lower contribution rate for companies employing 15 people to contribute to superannuation which provides a scope for the self-employed to contribute to superannuation.
“NSL recommended consideration of K500,000 as the revised maximum that could be held in the RSA product as it believes that as member balances continue to increase, it makes sense for RSA maximum to increase as well,” he said.
It was not clear if the National Superannuation Fund (Nasfund) was aware of the proposal and had come up with similar recommendations to BPNG.
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