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Provident Fund (Amendment) Act 1999

TUVALU

PROVIDENT FUND (AMENDMENT) ACT 1999
(Act No. 5 of 1999)

I assent

Rt Hon Sir Dr Tomasi Puapua PC KBE
GOVERNOR-GENERAL

Dated 30^th August, 1999

AN ACT to amend the Provident Fund Act.

ENACTED by the Parliament of Tuvalu-

1. Short title and commencement

This Act may be cited as the Provident Fund (Amendment) Act 1999 and shall come into force on a day to be appointed by the Minister by notice.

2. Amendments to Cap. 86

The Provident Fund Act 1984 is amended in the manner set out in the Schedule to this Act.

3. Discontinuance of Special Death Benefit Fund

(1) Without prejudice to any obligations incurred or rights accrued under section 5 of the Provident Fund Act 1984, that section is hereby repealed.

(2) The Special Death Benefit Fund established by section 5 of the Provident Fund Act 1984 shall be discontinued and its assets distributed in the manner and at the time set out in regulations made by the Minister.

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SCHEDULE

AMENDMENTS TO THE PROVIDENT FUND ACT

(section 2)

Section 3 (i) Add before the definition "appointed day" the following new definition-

""actuary" means a fellow of a recognised professional body of actuaries in Great Britain, Australia or New Zealand, or in such other country as the Minister may in an individual case approve";

(ii) In the definitions of "Board" and "Fund" insert "National" before "Provident";

(iii) Delete the definition of "deduction";

(iv) In the definition of "nominated person" insert "(1)" after "20".

Section 4(1) Insert "National" before "Provident".

Section 4(1)(c) (i) Delete "properly"; and

(ii) Delete "(excluding special death benefit payable under section 20(g))".

Section 4(2)(a) Delete "with the exception of the special death benefit payable under section 20(g)".

Section 4(2)(d) Repeal, with consequential amendments to paragraphs (b) and (c).

Section 6(1) Insert "National" before "Provident".

Section 8(1) Delete "once a month" and substitute "once every three months".

Section 9 Repeal subsection (4)(b) and substitute -

"(b) ensuring that the levels of contributions and benefits and the values of future pension benefits a reviewed and reported on by an actuary at intervals of not more than five years and that recommendations are made to the Minister for any consequent changes; and".

Section 11(1) Delete "or Special Fund" where it appears twice.

Section 17. Add the following new subsection-

"(3) The Minister may by regulations provide for the crediting of contributions in respect of any member."

Section 19. Repeal.

Section 20. (i) Renumber it as subsection (1);

(ii) Insert at the commencement of subsection (1) the words "Subject to subsection (2)";

(iii) Repeal subsection (1)(a) and (b) and substitute-

"(a) retirement benefit, that is to say, a lump sum payment to a member who, being not less than the age of 45 years, has retired from employment and has not elected to take a retirement pension in lieu of all the retirement benefit;

(b) retirement pension, that is to say, a pension payable to a member who, being not less than the age of 45 years, has retired from employment and has elected to take a retirement pension in lieu of part or all of the retirement benefit,"

(iv) Delete "permanently" from subsection (1)(e);

(v) Delete full stop after paragraph (g) and add the following new paragraphs-

"(h) housing benefit; and

(i) benefit as security for National Bank of Tuvalu or Development Bank of Tuvalu."

(vi) Add the following new subsections-

"(2) Entitlements to benefits cease on reaching the age of 65 years and any amount then standing to the credit of a member shall be paid out as a retirement benefit as defined in subsection (1)(a) or as a retirement pension as defined in subsection (1)(b).

(3) A voluntary member who was not a member before the coming into force of this Act shall not be entitled to a special death benefit.

(4) Subject to subsection (2), a member who has received a benefit under subsections (1)(a), (1)(d) or (1)(e) or is in receipt of a pension benefit under subsection (1)(b) and who returns to work becomes liable to pay contributions in accordance with sections 12 and 13 and so becomes entitled to further benefits.".

Section 22(1) (i) Delete "permanently" from paragraphs (b) and (c);

(ii) Add the following new paragraph with consequential amendments to paragraphs (e) and (f):

"(g) production of proof of survival of a person in receipt of a pension."

Section 22(2) Add the following new paragraph (with consequential amendments to paragraphs (d) and (e))-

"(f) proof of survival".

Section 23(1) (i) Delete "(b)" and insert "(1)" after "20"; and

(ii) Delete the proviso.

Section 23 Insert after subsection (1) the following new subsection-

"(1A) Entitlement to benefit under section 20(1)(b) shall be discharged in the manner prescribed in regulations."

Section 23(2) Delete "the proportion of"; and

Insert "(1)" after "20".

Section 23(3) Insert "the proportion of" before "the amount"

Insert "(1)" after "20"

Section 23(4) Add the following new paragraph (with consequential amendments to paragraphs (b) and (c))-

"(d) entitlement to benefit under section 20(1)(b) shall be discharged."

Section 23(5) Delete "equal to 100 times the amount of the deduction made under section 19 (2)" and substitute "$500."

Section 24(2) Repeal, and replace by-

"(2) On application by a claimant entitled to a lump sum benefit under section 20(1)(f), the Board may pay the benefit as a pension in the manner prescribed in regulations."

Section 27(2) Insert "(1)" after "20".

Section 32 Repeal and substitute the following:

"Notwithstanding the provisions of the Income Tax Act 1992, all the income of the Tuvalu National Provident Fund, all interest accredited to the members of that Fund, all sums withdrawn from, or paid out of that Fund except for fees, salaries and allowances paid to the members of boards established under the Provident Fund Act 1984, officers and staff employed by that Fund, and witnesses or other persons required to attend any place for the purposes of the Provident Fund Act 1984 shall be exempted from tax.".

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PROVIDENT FUND (AMENDMENT) ACT 1999
(Act no 5 of 1999)

EXPLANATORY MEMORANDUM
(This memorandum is not part of the Act)

The purpose of this Act is to amend the Provident Fund Act:

1. to provide for members on retirement to take a pension rather than a lump sum payment if they so choose, or a combination of both pension and lump slum;

2. to allow widows or widowers to take the death benefit in the form of a pension rather than a lump sum, or a combination of both pension and lump sum;

3. to allow members who have reached the age of 45 and are sill employed, to draw part of their benefits for the purpose of constructing or renovation of their own houses;

4. to allow members benefits to be used as security for National Bank or Development Bank loans;

5. to provide an express provision which exempts the Fund from paying income tax;

6. to discontinue the Special Death Benefit Fund and provide for its distribution among members. Special death benefit which involves comparatively small amounts will in future to be paid out of the general moneys of the fund;

7. to rename the Tuvalu Provident Fund as the Tuvalu National Provident Fund; and

8. to make various minor and tidying up amendments to the to text of the Act. The amendments are conveniently set out in the Schedule for ease of reference. Regulations providing detailed provisions for the new pension scheme will be made by the minister once this Act is brought into force.

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