How did the FNPF do it?

Between 2011 and 2012 the value of assets held by the FNPF increased from $3.8 billion to $3.9 billion. That’s an increase of 2.6%.

Somehow the FNPF managed to give a dividend of 5.5%. How can this be possible? How can an increase of funds of only 2.6% allow the Fund to award a 5.5% increase in the value of the funds held by the contributors?

To do this the Fund has to reduce something on the other side of the balance sheet, namely the obligation to pay out funds to people who are going to retire and take a pension.

Yes, this dividend, which is really fairly modest, has been paid for by pensioners who have had to suffer their pensions being cut below the levels promised to them.