by Rob Hosking
The downturn in world equity markets has meant that 300 employer contributors to the National Provident Fund (NPF) have had to resume payments after a three-year ‘holiday’.
The fund, which was closed to new contributor members in 1991, is still one of New Zealand’s largest superannuation funds, and is split into 15 separate schemes.
After a series of bumper returns in the mid-1990s, actuary Christine Ormrod recommended that two of the schemes, the aircrew and the DBP scheme, resume payments after a three-year break.
Of the NPF schemes these two had the greatest exposure to overseas share markets. The return from overseas sharemarkets was a loss of 12.55% compared to a positive return of 30.67% in the previous year.
The aircrew scheme made a net loss before tax of $461,000, after a $5.9 million profit in 2000.
NPF chief executive Alan Langford says the funds' returns in the mid-1990s were very good.
"The actuary made the assumption that, there should be enough money to meet benefits payable to members. Unfortunately that surplus has been eliminated."
The government still guarantees the benefits payable by all NPF schemes, as well as investments and interest deposited before April 1 1991. Since the fund was restructured it has been administered by Jacques Martin, although the ending of the payments holiday still had to be approved by Minister of Finance Michael Cullen.
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
| « Colonial buys NZ trust | Sovereign takes regulation bull by the horns » |
Special Offers
© Copyright 1997-2024 Tarawera Publishing Ltd. All Rights Reserved