GSF managers say Treasury numbers wrong

The GSF managers are taking issue with the $315 million loss figure included in the recently released Crown Financial Statements.

Thursday, October 3rd 2002, 1:15AM

by Rob Hosking

Further fur looks set to fly over the Government Superannuation Fund (GSF).

The fund is taking issue with the $315 million loss figure included in the recently released Crown Financial Statements.

"That $315 million is not our figure," GSF chairman Basil Logan told Good Returns yesterday. "We don’t agree with Treasury’s assessment there."

The fund will present its annual report to Parliament by the middle of the month, he says. While this will still show a small, post-tax loss, it would not be the figure put up by the Treasury, he says, and subsequently used by various Opposition politicians.

The fund was reported, in the Crown Financial Statements for the year to June 30 as having an increase in its unfunded liability of $804 million.

Part of that is due to changes in economic assumptions, and also in interest and inflation rates. The $315 million figure – prefaced with ‘around’ in a note in the financial statements – is the Treasury’s estimate of the decline in value of the fund’s assets since the fall in global equity prices and the appreciation of the New Zealand currency.

It is this valuation that the fund’s managers are taking issue with.

Further light on the fund’s valuation and prospects could have been shed in the regular briefing to incoming ministers, which normally takes place at the start of each Parliamentary term. Usually, most or all of such briefings are made public.

The Government Superannuation Fund briefing has been conspicuously by its absence this year. Logan said this was because one had not been put together.

He ascribed this to an "oversight" by the new board and management, and said the material will be included in its annual report to Parliament.

Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.

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