Hon Dr Michael Cullen
Minister of Finance
1 September 2006 Media Statement
New Zealand Super Fund caps off super week
Finance Minister Michael Cullen today congratulated the managers of the New Zealand Superannuation Fund for another
outstanding investment performance.
"For the June financial year the fund earned a return of 19.2 per cent with funds under management climbing to $10.1
billion – it's a result that will be the envy of many fund managers across the industry," said Dr Cullen.
"The fund's expectation is to exceed the risk free rate of return (the return on Treasury bills) by at least 2.5 per
cent over the long term. The risk free rate of return is currently 6.77 per cent so today's result is excellent.
"It is the nature of equities markets that results will not always be as good as this. However, the fund has performed
extremely well since inception in 2003 with annual returns averaging 14.9 per cent. This is pleasing, as good returns
will ease pressure on future governments to fund New Zealand Superannuation.
"Today's result caps off a great week for the government's superannuation strategy and the retirement dreams of
thousands of New Zealanders.
"On Wednesday night the KiwiSaver Bill passed its third reading. This was another important milestone in securing the
long term financial security of New Zealanders. KiwiSaver will provide an easy savings choice for thousands of workers
from 1 July next year.
"The Labour-led government has shown continuing leadership in building a savings culture. National has no vision, no
strategy. It was the only party to vote against KiwiSaver.
"The New Zealand Superannuation Fund, the State Sector Retirement Savings Scheme (SSRSS) and now KiwiSaver are all
significant planks in our strategy of preparing for the future.
"I am also heartened that 33,333 civil servants are now members of the SSRSS, an increase of 17 per cent for the June
year. The message is getting through that all of us - government, workers and employers - must do more to secure our
futures.
"Indeed, our policies have been admired around the world. New York credit rating agency Standard & Poor's said in June New Zealand was one of the best placed nations in the world to meet the challenges of an ageing
population."
Note
The New Zealand Superannuation Fund was established in 2003 with an initial allocation of $2.4 billion. It aims to
partially provide for the future cost of New Zealand Superannuation, thereby reducing the fiscal pressure on future
governments as the proportion of the population aged over 65 climbs. At present, one person in eight is over 65. This is
forecast to rise to one in four by 2030. By then the fund is expected to total over $120 billion.
Further information on the fund is available at:
http://www.nzsuperfund.co.nz/
ENDS