PNG Government Owes Superannuation Fund Nearly $700 Million

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Pacific Islands Development Program, East-West Center With Support From Center for Pacific Islands Studies, University of Hawai‘i

Deductions from salaries not being passed on to fund

By Malum Nalu

PORT MORESBY, Papua New Guinea (The National, Dec. 9, 2015) – Treasury Secretary Dairi Vele says the Government owes Nambawan Super a huge backlog of superannuation it deducted from public servants’ salaries.

The figure, according to a well-placed source, could balloon to as high as K2.5 billion [US$825 million] by the end of next year.

The source recently told The National that the current unfunded State liability was K2.1 billion [US$693 million] and "this will now balloon out to something like K2.5 billion over 2016."

Vele, however, could not give the exact figure. But he admitted that it was "very large" and had accumulated "for 15 to 20 years now".

He said that there were two issues.

"One is the old liability – which is a very large number that’s been going on for 15 to 20 years now," he said.

"The other number is smaller – K200 million [US$66 million] or something like that." He said because Government funds this year were greatly reduced, they were looking at developing a payment plan "rather than a one-off hit".

"It’s easy for us to make adjustments in the middle of next year. It’s difficult to make adjustments at the backend of the year now," he said.

"We were supposed to pay K200 million, but because the revenue situation has changed, what we need to do is give as much as we can now and towards the end of next year when some more funds are freed up. Then we can attack the K200 million."

Nambawan Super chief executive officer Garry Tunstall recently said that the Government owed the company K109.6 million in unpaid superannuation.

"It’s K109 million for November-December last year through to the end of September this year," he said.

"They’re making arrangements to pay us. When the Government gets the money, they will."

The source said the Government had not budgeted for the K300 million for the Nambawan Super crystalised liability – K150 million for 2014 and 2015, and K150 million for 2016.

"The Government budgeted only K18 million," the source said.

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