The following guidelines are organized in four parts:
Part A, Investment Governance Principles
Part B, Investment Governance Structures
Part C, Common Processes
Part D, Processes Specific to Internal and External Investment Management
These guidelines are consistent with the ISSA Guidelines on Good Governance, a comprehensive set of guidelines covering a range of internal governance processes required in the administration of social security institutions.
For these guidelines, the definition of investment governance begins with describing the key elements of a system of decision-making and oversight used to invest the assets of a fund. Thereafter, the definition extends to define investment governance as this relates specifically to the management of reserve funds of social security institutions.
The ISSA Guidelines on Investment of Social Security Funds allows members to follow a progressive process of governance. This starts with the setting up of the various structures involved in the process and includes defining roles and how these interact with the processes to be set up in order that governance objectives are met. These processes include defining and monitoring an investment strategy, monitoring performance and reporting.
The guidelines presented here are applicable to the board, management, investing institution, investment committee and investment units. While recognizing that some social security institutions carry out investment management internally while others use external managers, they aim to allow institutions to follow a progressive process of governance.
The authority pension fund is a long term investor with a cash-flow positive over the near term and a long-term horizon. Hence , the authority board believed the priority for the next five to Ten years should be to grow the investment portfolio in order to reduce the reliance of future contribution to pay for benefits . The authority assets were experiencing faster growth in 2014 due to increased cash inflow from monthly contribution by additional 3 per cent.
Fiji National Provident Fund’s (FNPF) engagement with International Finance Corporation (IFC) has helped the Fund to move into previously unexplored Investment Territories. This has helped the Fund in diversifying its investments and upskilling our staff. Co-Investments with IFC has resulted in reduction of Investment Risks through their expertise and risk sharing through both equity and debt funding. IFC’s involvement in Fiji and the setup of a local office has boosted FNPF’s investment confidence in the Global Market.
The Historical Reparation for Retirees and Pensioners Act (Ley de Reparación Histórica para Jubilados y Pensionados) of June 2016 provides for the current pension benefits of retirees and pensioners to be fully recalculated and where the discrepancies are in the beneficiaries’ favour, settlement offers are offered and which are then subject to judiciary approval to avoid future litigation.
This good practice comprises a workflow platform which automates a series of actions, activities and tasks performed by users when executing certain established processes. This allows work on the implementation and improvement of routine processes to be coordinated and organized. The platform integrates workflows, the requisite documentation, and internal and external services throughout the organization and allows processes to feed into one another which otherwise would be carried out in isolation.
