New Zealand Superannuation Fund

The New Zealand Superannuation Fund is a sovereign wealth fund in New Zealand. New Zealand currently provides universal superannuation for people over 65 years of age and the purpose of the Fund is to partially pre-fund the future cost of the New Zealand Superannuation pension, which is expected to increase as a result of New Zealand's ageing population. It was created by the New Zealand Superannuation and Retirement Act 2001 on 11 October 2001 under the leadership of Michael Cullen, Minister of Finance in the Fifth Labour Government,[1] and is colloquially known as the "Cullen Fund".[2] The New Zealand Government has contributed $14.88b to the fund to date.[3] The sovereign fund posted a record 25.8% return in the twelve months till 30 June 2013.[4]

In 2009, the National Government suspended payments to the fund.[5]

The Fund has had a high profile in New Zealand after it and Infratil (a publicly listed New Zealand company) acquired Royal Dutch Shell's downstream assets in New Zealand, since renamed Z Energy.[6][7]

Banco Espirito Santo loss

In February 2015 the Superfund wrote off a $150 million loss in a Goldman Sachs organised loan to the Portuguese Banco Espirito Santo. The loss represented 0.7% of the total value of the Superfund's investment portfolio at that time. [8] Managers of the Superfund appeared before Parliament's commerce select committee on 26 February 2015 where they confirmed that legal action had been commenced against the Bank of Portugal to recover the lost money.[9]

Debate

The Superfund's investment portfolio is the subject of ongoing debate. Labour Party MP David Shearer called in August 2014 for divestment from a company manufacturing white phosphorus which is used by the Israeli Defence Force as a weapon.[10] In February 2015 Green Party MP Russel Norman called for the Superfund to divest $676 million from fossil fuel companies.[11]

Exclusions

The Superfund maintains a list of excluded companies similar to the Government Pension Fund of Norway.[12] It includes:

References

  1. ↑ "New Zealand Superannuation and Retirement Income Act 2001". 7 July 2010. Retrieved 12 May 2011.
  2. ↑ "National's KiwiSaver and "Cullen Fund" policies". Chapman Tripp. 13 November 2008. Retrieved 12 May 2011.
  3. ↑ "NZ Super Fund hits milestone". Fairfax Media. 18 October 2012. Retrieved 18 October 2012.
  4. ↑ "New Zealand Superannuation Fund Posts Record 25.8% Return for 2012-2013". Sovereign Wealth Fund Institute. Retrieved 3 September 2014.
  5. ↑ "CONTRIBUTIONS SUSPENSION", nzsuperfund.co.nz/
  6. ↑ Bradley, Grant (18 November 2009). "Infratil 'likely' to seal deal with Shell". New Zealand Herald. Retrieved 29 November 2009.
  7. ↑ Bogoievski, Marko (3 November 2009). "Shell New Zealand Limited". NZX. Retrieved 19 December 2010.
  8. ↑ "NZ Super Fund loses $200m after 'risk free' loan to Portuguese bank". New Zealand Herald. 19 February 2015. Retrieved 23 March 2015.
  9. ↑ "Super Fund confirms Portugal bank legal case". New Zealand Herald. 27 February 2015. Retrieved 23 March 2015.
  10. ↑ "NZ Super Fund has deadly portfolio". Sunday Star-Times. 3 August 2014. Retrieved 23 March 2015.
  11. ↑ "Greens want NZ Super Fund to drop fossil fuels". Stuff.co.nz. 13 February 2015. Retrieved 23 March 2015.
  12. ↑ "Companies excluded from the New Zealand Superannuation Fund as at 26 September 2014", nzsuperfund.co.nz/

External links