Resources to strengthen NZ Super Fund governance

“The New Zealand Superannuation Fund will be able to broaden its investments through an increase to the Fund’s operational budget agreed by the government,” Finance Minister Michael Cullen said today.

The Fund will receive an additional $1.15 million in the current financial year and an extra $2.3 million – from $3 million to $5.3 million a year – thereafter. The government has also approved a one-off capital injection for 2005-06 of $225,000, including GST, to update the Fund’s IT resources.

Dr Cullen said Guardians of the Fund had sought the increases early this year and that, because of the size of the request, the government had decided to await the report last month of Jonathan Eriksen, the independent expert commissioned to review the Guardians’ performance.

“Mr Eriksen found that the investment policies, standards and procedures established by the Guardians were appropriate to the Fund and that there was best practice governance and accountability across the organisation.

“And he endorsed the Guardians’ argument that the Fund should consider investing in more complex asset classes such as infrastructure and private equity and that this would require increased funding for investment, legal and tax advice.

“But I have made clear to the Guardians that they should not come back for a further increase to their operating budget until 2007-08 at the earliest,” Dr Cullen said.

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