Super fund target maybe lowered
Thursday, June 12th 2003, 6:39AM
by Rob Hosking
Finance Minister Michael Cullen says he "wouldn’t be surprised" if the target of 9.4% return for the government’s pre-funded superannuation scheme is revised downwards.
Pressed on the issue at Parliament’s finance and expenditure select committee by National MP John Key, Cullen said that the Guardians of the fund would shortly take over much of the work on calculating likely returns from the New Zealand Superannuation Fund.
"It will be up to them to revise those numbers to determine what the realistic long term returns are."
Cullen said that even assuming the annual contribution has to be increased because of a lowering of the assumed return of the fund, the change is unlikely to be all that large.
The government put an extra $80 million into the fund in this year’s Budget.
Thus far the Treasury has calculated the likely return from the fund, as the basis for working out how much the government needs to put into it each year.
In the future though, that calculation will be based on the Guardians’ investment strategy. That will be finalised over the next three months, Guardians spokesman Tim Mitchell told Good Returns.
Some details on strategic asset allocation are likely to be announced by the end of July, he said.
If there is to be any change in the annual taxpayer contribution to the fund, that will emerge in this year’s December Economic and Fiscal Update.
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues. Special Offers
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