Employee related issue

Definition of an Employee

An employee is a person who earns a salary of Vt. 3,000 or more per month and would satisfy the following requirements:

Contract between employer and employee

A contract of service can be oral or in writing, expressly stated or implied. It is the arrangement entered into when one person agrees to work for another, giving personal service in circumstances, which gives the other person a right of control over the work that is being carried out and how it should be carried out. If the employer needs clarification as to whether or not a person is an employee, that employer is requested to write to the Fund.

Change of Member details

The Fund will provide a Change of Member Detail Form for members who wish to change their particulars. The Form should be completed and sent back to the Fund.

Voluntary Contributions

Persons who are not required to contribute to the Fund as employees may apply for permission to contribute voluntarily. Voluntary status is for persons who have never made contributions to the Fund as well as to existing members who have stopped making contributions as employees. These former employees will continue to build up their savings in the Fund.

Voluntary contributors will also benefit from the Special Death Benefit Scheme in the event of death. The contribution paid by the voluntary contributor is solely his or her own. It has no employer/employee relationship as the voluntary contributor is paying a fixed rate. Further, when deciding to become a voluntary contributor, the rate of interest paid by the Fund compared to other forms of investment is taken into account. In addition, the contributor must note that the contributions can only be withdrawn based on the four reasons for withdrawal.

A person less than 14 years of age and more than 55 years, cannot join the Fund as a voluntary contributor. A person who is already a member of the Fund, may, however, be allowed to make voluntary contributions at any age.

If the person is accepted by the Fund as a voluntary contributor, that person may make voluntary contributions at a minimum of Vt 1,000 to a maximum Vt10, 000 per month. The voluntary contributor should specify the amount of money to be contributed per month. If the Member is late in paying the contribution, no penalty will be imposed. But if the contribution is two months late from the agreed mode of payment, that contribution will be refused. The Fund may cancel the voluntary membership if the agreed arrangement is not complied with.

Ministers of Religion

Special provisions apply to Ministers of Religion. A Minister of Religion is not usually considered to be an employee of the church the Minister serves. This is because the terms of engagement do not normally create a contract of service between the Minister and the body responsible for paying his or her salary. The religious organization may, however, apply to pay contributions on behalf of the Minister, acting in this respect as an employer. This provision has the advantage that the Minister can be treated as a voluntary contributor, which enables the church to choose the rate at which they wish to contribute. In these circumstances, the Fund will treat the religious body as an employer and expect it to assume the responsibilities and obligations of an employer under the VNPF Act.

Members Accounts

The Fund maintains a separate savings account for each member using the membership number allotted to the member as identification. The amount of all contributions paid is entered into the member's account together with the identity of the employer making the payments.

Interest on Accounts

Each year interest is added to the member's savings account at a rate declared by the Board of Directors. This interest is calculated by applying the interest rate on the balance of the member's account at the start of the financial year. The interest calculated is added to the member's account at the end of that year.

In respect of those members who withdraw their money during the course of the year, an interim interest is added on to his or her balance, calculated on a monthly basis during the year when the money has been withdrawn

Statement of Account

The money in the member's account is his or her money and the member can contact the VNPF at any time by mail or by coming into the VNPF offices to find out the balance of his/her account. Confidentiality is very important so the member must bring the membership certificate or state the membership number along with suitable proof of identity.

The Fund is required under the provisions of the VNPF Act to issue a Statement of Account to a member each year. However, the Fund sends out two Statements of Account. A half-yearly interim Statement of Account is sent to members in July of each year with a newsletter. A final Statement of Account is sent to members in March for the previous year- ending with the VNPF newsletter. If the half-yearly Statement of Account or the final Statement of Account does not reach the member within a reasonable time following those dates, he or she should contact the VNPF immediately.

The Statement shows the opening balance for the year, the contributions paid during the year, the interest for the year, special death benefit deduction (if applicable) and the closing balance. There will be no interest paid to a member who joins the Fund during the first year because the opening balance for this new member would be zero.

The Statement of Account is sent directly to the postal address nominated by the member on his or her registration form, or the Change of Member Detail form as it appears in the VNPF records at the date of posting.

Withdrawal of money from a member's account

Money may be withdrawn from a member's savings account when a member:

If a member, or nominee, qualifies for any of the above, he or she may obtain an application form for Withdrawal of Members' Credit (either Form M/A, M/D, M/M, M/I) from the Fund, complete the appropriate sections and return it for processing. The member (or in the case of death, the nominee(s)) must ensure that all supporting documents are submitted along with the appropriate form.

A member who has reached the age of 55 is allowed to withdraw his or her savings. That member may continue to contribute if he or she continues to be employed and may make further withdrawals every two years until he/she retires.

Nomination

When a member registers with VNPF, the member will also be requested to nominate a person or persons (nominee(s)) to receive the member's money in the event of death. The member must choose his/her nominees in accordance with the VNPF Act.

When a member dies prior to attaining the age of 55 years, an amount of Vt175, 000 or a proportion of this money, is added to the members account for payment to the nominee(s) of the member. The amount available depends on the contributions the deceased member had made to the Special Death Benefit Scheme during the last five years as a death benefit

  • Employed in Vanuatu under a contract of service or apprenticeship, whether written or oral or whether expressed or implied.
  • A citizen of Vanuatu who is employed outside Vanuatu by an employer having a place of business in Vanuatu.
  • A citizen of Vanuatu who is a master or member of the crew of any vessel, or as captain or member of the crew of any aircraft, employed by a person or persons
  • having their business in Vanuatu.
  • Is declared at the discretion of the Minister (after consultation with the Board), by an Order published in the Gazette, to be an employee for the purposes of the Act.
  • He or she is a member of a cooperative society and is employed by that society.
  • He or she is a shareholder or director of a company registered in Vanuatu and is employed by that company.

  • Reaches the age of 55.
  • Has died (money paid to his nominee(s)
  • Has become permanently physically or mentally disabled and is incapable of working again.
  • Is going to leave or has left Vanuatu with no intention of returning.

Employment outside Vanuatu

An employee also includes any citizen of Vanuatu who is working outside of the country for an employer whose place of business is in Vanuatu. It also applies to any citizen of Vanuatu who is employed on a ship or aircraft owned by persons having their place of business in Vanuatu.

Non-Citizens

A non-citizen who is employed in Vanuatu and earning a salary of Vt. 3,000 or more, per month, is also an employee and is required to register as a member of the Fund. However, a non-citizen may be exempted from liability to contribute under certain circumstances (see Exceptions to payment of VNPF contributions for employees).

Persons treated as employees

The Minister of Finance after consultation with the Board, can, by Order, declare that any person or class of persons who do not fall under the definition of an employee, be treated as an employee.