What is Nambawan Super (NSL)and where do I fit in?
The Nambawan Super Fund is a Superannuation Fund that provides an opportunity for people working in the public service and the private sector (companies), in Papua New Guinea to ensure their own future financial security.
Superannuation funds exist all over the world and are generally termed as contributory pension schemes. They are designed to encourage savings. Employers participate too by subsidizing contributions made by employees.
Your fund assists you in providing for the future security of yourself and your family. When, for instance, you retire, or if you become permanently disabled, you can be confident you will still receive an income. When you die, your family will be taken care of you.
It is particularly important for Papua New Guineans to be members of such schemes, because the country does not have a government-funded social welfare system that takes care of people when they no longer work.
Who are the Members?
Members are employees of any organisation in Papua New Guinea and are citizens of the country. They can either be employed by companies, in government departments and statutory authorities, on a full-time, part-time or casual basis as long as they have been in employment continuously for 3 months or more.
Do I have to join a superannuation fund?
Yes. Membership is compulsory for all employees after 3 months’ continuous employment.
Who says that I have to join the fund?
It is a requirement of Act of Parliament, the Superannuation (General Provisions) Act 2000, to ensure a form of future security for members of the public service as well as those in the private sector.
Who looks after my money in the fund?
Nambawan Super, as Trustee administers of the fund in accordance with the superannuation legislation. The trustee is controlled by a Board made up of six people who are commercially competent directors.
How do I know that my money is safe?
The Trustee may only make investments that have been approved by the licensed Investment Manager. The Bank of PNG supervises the licensing of both the Trustee and Investment Manager.
So how do I join?
Becoming a member is automatic after 3 months of continuous service.
Do I have to be interviewed to sign up and join the fund?
Not as such. As explained before, when you are eligible, membership is automatic. If there is anything further you would like explained
If there is something I am not sure about, who do I speak to?
Nambawan Super and the staff of the Fund Administrator are there to help you and members are encouraged to contact the officers with any questions they have, about any matters that need clarification.
What if I work outside of Port Moresby?
You can visit any of our 17 branches nationwide.
How do I know if and when I have joined the Fund?
Your employer will start deducting contributions, which you will see on your pay slip. Your employer remits those contributions to the Nambawan Super each fortnight. If at any time there is nothing on your pay slip to indicate a deduction has been made, you should speak to your personal officer.
What sort of information about myself do I need to provide when I join?
Your employer will already have much of the information required because you provided it when you applied for your job. (Things like your birth date, postal address, date of commencement of employment etc).
There are, however, times when circumstances change in your job or your family situation, so you are advised to inform the Trustee yourself of those changes to make sure your account records at the fund are up to date. It is very important that you provide a list of beneficiaries in the case of your death.
How do I know my employer will put his share of money into the fund?
As per the Superannuation Act, an employer must make its contribution as well. Both employer and employee contributions are remitted to Nambawan Super each fortnight.
What does it cost?
As you will find out in the questions and answers in this section, it is very straight forward. There are no hidden costs in the scheme. Superannuation schemes are structured to be affordable for all members. That is why contributions are based on percentages of wages rather than set amounts.
Does it cost me anything to join the fund?
No joining fee is imposed on members.
Does it cost me anything to have my money looked after by the Board?
Like you, the Trustee staff have to be paid for their work, but their wages do not come out of your contributions. The Board invests your money wisely and securely, so it makes profit. All administration costs come out of that profit.
How much will my contributions be?
All members pay 6% of their gross fortnightly salary.
Can I contribute more than the amount stated in the Nambawan Super Act?
Members may, if they wish, make additional after tax contributions to the Fund to maximize the benefits they will be entitled to on withdrawing from the Fund.
Does my gross salary include overtime pay, holiday, sick, or long service pay?
No, none of those are included.
If my spouse works, does our money go into a joint account?
No, Every member is treated as an individual, so contributions by spouses are maintained in separate accounts.
Do I get all my contributions back if I leave before I have been a member for 12 months?
No, You will no longer have immediate access to your funds. Generally, members will only be able to access their funds immediately by reaching the relevant eligibility age.
If I get a wage rise, are my contributions adjusted accordingly?
Yes, In fact, whenever your wages change, for whatever reason, your contributions are adjusted to be 6% of the new total.
What do I get out of it?
Members are well rewarded. Members earn interest on the contributions they make and the employer also makes contributions on your behalf that also earn interest.
How much does my employer contribute?
Your employer matches your contributions at the rate of K1.40 for each K1.00 of your contributions. That is, you contribute 6% and your employer contributes 8.4% on your behalf.
Does that mean my benefits include interest?
Yes, interest credited is included each year.
Is there a time period before I qualify for the subsidy from my employer?
Yes, After 3 months employment you must contribute to the Fund and your employer is obliged to contribute also at the same time.
What interest do I earn on my money?
There is no set interest rate because returns on investments vary. Every year, when the Trustee has assessed its profit, it decides on how much interest can be allotted to contributors.
How do I know how much interest I earn each year?
Every member will be sent a statement showing account activity as at 31 December of the previous year.
When do I receive the interest?
Although interest is credited to your account each year, it is not paid until such time as you claim a refund, such as when you retire, or leave your job.
Is interest paid on my employer’s contribution?
Interest is paid on employer contributions as well as employee contributions.
What are various ways of ending employment?
Six different types of termination of employment are possible: Retirement, Resignation, Dismissal, Invalidity, Emigration and Death.
How are benefits paid in each case?
Generally, payment is in lump sum, but only payable when you are eligible to receive your benefits from the Fund.
I am due to retire soon and would like to make plans. How do I know how much money I will be entitled to?
The contributor information statements issued by the fund, to all of its members each year, are detailed and include cumulative figures.
So whether you are retiring or considering resigning, your entitlement will be the amount on your last statement plus contributions and interest paid since the last statement issued.
It is important to check your statement and advise us of any missing details such as your address.
Making a claim – getting it right
Sometimes members are not aware of what paperwork needs to accompany a claim. If it is incomplete, the claim will be delayed until proper documentation has been provided to the Trustee.
How do I get a refund?
You need to obtain a form, called a Nambawan Super Separation Authority form from your employer or the Trustee. Complete the form and then return it to your employer who will lodge it with the Trustee.
Along with the Separation Authority Form, The Trustee must be supplied with a certified copy of your salary history record and a copy of the approval letter of resignation, retrenchment or retirement.
How long does it take?
Provided all documents is complete and correct, the Fund Administrator will make every endeavor to pay your benefits within 5 working days of receipt of the Separation Authority Form from your employer. It should be noted, however, the Fund Administrator cannot be responsible for any delay in the provision of correct documentation from employers or members.
What about Income tax?
Unfortunately, income tax is a universal fact of life. Everyone earning above a certain amount has to pay it.
Do I pay tax on the part of my wages that goes into the Fund?
Yes, because tax is applied to your total salary before any deductions.
Do I pay tax on my refund?
Legislation requires that interest be taxed, but the tax is not payable by you until you make a claim for a refund.
How do I pay the tax when I make a claim?
There is no need for you to be concerned about that. The Fund Administrator deducts it and remits it on your behalf to the Internal Revenue Commission from your final payout.
If I change my employment situation, what happens?
People change jobs for many reasons. Your membership of the Nambawan Super may or may not be affected by a change, depending on what you do, but security is an important factor in everyone’s life, so it should be taken into account when considering a change.
What happens if I change jobs?
Your status as a member of the fund does not change. The name of your new employer will be lodged with the Trustee and if there is any difference in your salary, your contributions will be adjusted accordingly. Members are asked to provide the Trustee with new employment details. Your contributions held in your old account will be transferred to your new account. You must advise the Trustee of the changes yourself.
If I change jobs from public service to private, can I stay a member of NSL?
Where members leave and start employment elsewhere, they have to contribute to the Fund of choice of their new employer.
Members may elect that accumulated benefits remain in Nambawan Super or they can be transferred to the new employer’s fund but they may not withdraw from superannuation.
What happens to my money if I leave my job and doesn’t find any job?
Where new employment is not found after 3 months you may elect to draw down some of your funds on a monthly basis.
Where unemployment continues for over 12 months the balance of your funds may be withdrawn at that time. But generally members will be able to withdraw their funds immediately, where they terminate employment having reached the relevant eligibility age, which in most cases is 55 years.
What happens to my money if I am dismissed?
You will receive the same benefit as if you had resigned but the similar situation will apply to you as outlines in questions 43 and 44.
Retirement. Is it time to reap the rewards?
You have worked hard and saved through the superannuation scheme to ensure your financial security. It is time to enjoy life. it is also time to make one of the most important decisions of your life: What to do with your savings.
Members are strongly advised to bear in mind that the retirement benefit may well be the last opportunity to have money coming in regularly, to look after you and your family so make careful choices to use the money wisely.
What do I need to do when I retire?
You will need to complete a form that both you and your employer will sign. This form and supporting documents are then sent to the Fund Administrator or Nambawan Super head office to process.
How much do I get?
You receive the total of your contributions, plus interest, plus your employer’s contributions and interests, less income tax. This will be paid to your bank account in lump sum.
What happens if I am considered invalidity, physical or mental incapacity?
We never know what is around the corner for us. Peace of mind comes when you know that we will be all right financially if something, like an accident prevents us from ever working again. If that does happen to you, the Fund has provision to ensure you are looked after.
What happens to my money if I get sick, but the Doctor does not know whether I will be able to go back to work in a few months?
Since the Fund can provide for only permanent disability, you would not be eligible for a pension. There could be, however, other schemes like worker’s compensation, medical insurance, etc which may help you in the meantime. If your doctor eventually decides you will not be able to return to work an invalidity pension may be paid.
The superannuation legislation prohibits the Trustee advancing funds to service these types of benefits for members.
Does the Fund have any medical benefits?
All members are encouraged to take out medical insurance. There are number of schemes available with a range of options. It is up to individual members to identify the scheme that suits them best. Where these are available from the Trustee, they must be paid for from additional member contributions.
Death: look after your loved ones!
As a member of Nambawan Super, you can be sure that in the event of your death, your beneficiaries will receive some financial support. It is very important to inform the Trustee who your beneficiaries are, so the right people are looked after.
What happens to my money when I die?
Your money will be paid to your nominated beneficiaries.
Who can I nominate as a beneficiary?
Anyone you wish. You can have one or a number of beneficiaries and they can be, for instance, your spouse, children, parents, brothers, sisters, or other relatives or friends.
How do I know that my money will go to the right people, when I die?
It is very important that you accept the responsibility for advising the Trustee who your beneficiaries are to be. If you have done that, but your family circumstances change, you must advise the Trustee of those changes so that your records can be updated.
How would my beneficiaries claim my money after my death?
Your beneficiaries would need to obtain a form, called a Separation Authority Form, from your employer; they complete the form, and then return it to your employer who would lodge it with the Trustee with a copy of the Death Certificate. Benefits are then calculated and paid by the Trustee to nominated beneficiaries.
What if I were single and died without nominating a beneficiary?
The Trustee would determine and pay your next of kin. Where no next of kin are identified the Trustee would pay the Public Curator who than has to try to decide who should be your beneficiary. That could take a very long time.
Changes in your personal life- make sure your records are kept up-to-date!
While you are a member of the Fund, you may change your personal circumstances. You may marry, your spouse may die, or you may have children you want to ensure are included as beneficiaries. Please advise the Trustee every time your personal circumstances change. Otherwise, your account records will not be up-to-date and that could give rise to a number of problems.
What if I am single when I join the Fund, but marry later on?
Like all situations where you make changes, you must advise the Trustee of your new status. If you wish your spouse to be your beneficiary, you must provide their name, the marriage certificate and personal details, such as their date of birth.
What if I get divorced from the person I have nominated as my next of kin and marry someone else?
If you wish your new spouse to be your beneficiary, you must complete a new nomination form so your records can be updated.
Can my children from my first marriage still get some payment when I die, even if I have had more children in my second marriage?
Yes, if however, you wish that to happen, you must provide the Trustee with a list of their names and personal information such as date of birth and detail what portion of your entitlement they are to receive.
What if I get divorced and do not marry again?
If you decide your ex-spouse is no longer to be your beneficiary, then you must complete a new nomination form, providing the name and personal details of your new beneficiary, so your records can be updated.
It sounds like a bank account. Is it?
Not really. Superannuation schemes are not like Bank Accounts from which you can withdraw savings at any time.
That would defeat the purpose because it would provide too much temptation to spend now and forget about the future. Members do, however, earn interest on their money just like they do on savings accounts.
Can I pledge all or portion of my contributions as security for a loan from a commercial bank or any other financial institution?
No. Contributions cannot be changed or used as security.
Can I borrow money from the fund for other things like paying my children’s school fees, family medical expenses, buying a boat, or even going on holiday?
Your fund account is not like a Bank account. Members are, however, encouraged to establish savings accounts at other financial institutions that offer those facilities to customers with proven savings records.
Can I borrow money from the Fund for any purpose?
Generally no, but one of the special benefits the Fund can offer is scheme which allows members who qualify to apply for a housing advance.
A special advantage for members: the chance to buy a home!
Home ownership is another form of security for you and your family. Nambawan Super is able to advance some of your funds in certain circumstances for housing purposes. The number of members who own their own homes increases every year through this scheme.
What is a housing advance?
It is an advance against a member’s future payment. If you wish to buy or build a house, you can make an application to the Trustee. Advances are conditional, but the most important factor is that it must be a dwelling house for you, the member to live in.
How do I go about applying for a housing advance?
Housing advance application forms are available from Nambawan Super offices. Completed forms are submitted to the Trustee, together with the plans and quotations for materials and labor in the case of new homes and in the case of existing homes for purchase, a contract of sale and certificate of land title needs to be submitted with the application form.
How much can I apply for?
A member may, after not less than five years membership, apply to withdraw 100% of the member’s contributions and accumulated interest.
Does it cost me anything to apply for a housing advance?
There is a nominal application fee for a housing advance that covers the cost of processing the exit payment from the Fund plus any statutory charge to register a mortgage or similar document fees.
Are there any costs involved?
Members are required to pay legal costs, such as conveyancing fees, stamp duty, and their own land registration fees associated with any house purchase.
How long does it take to approve and process a housing advance?
Approvals for housing advances are granted depending upon the availability of funds. Once all necessary required documents are submitted, it can be approved in a matter of days.
If my housing advance is approved, how is the money paid?
The supplier, such as the builder of a new home, or the owner of an existing one for purchase, is paid directly by the Trustee. Advances may not be paid directly to the member.
If I am given a housing advance, how do I repay the money?
Under the current legislation there is a requirement to progressively repay the amount advanced. Additional contributions need to be made at the minimum rate of 2% to repay the advance. This additional 2% contribution is on top of your normal 6% contributions.
Do I pay any interest on a housing advance?
Interest is effectively charged on a housing advance. It is offset from the interest credited to the members contributions account.
What happens if I don’t repay housing advance and lose my job, get injured so I cannot work or I die?
The amount advanced under the scheme is deducted from the total benefit entitlements.
When can i be eligible to apply for a housing advance?
After five (5) continuous years of membership.