Frequently Asked Questions
Find out the answers to some frequently asked questions about the Guardians and Fund.
What is the difference between the Guardians and the Fund?
In simple terms, the New Zealand Superannuation Fund is the money and the Guardians of New Zealand Superannuation is the organisation set up to manage the money. Both the Fund and the Guardians were established under the New Zealand Superannuation and Retirement Income Act 2001 (the Act).
The purpose of the Fund is to reduce the tax burden on future taxpayers of the cost of New Zealand Superannuation. The purpose of the Guardians is to manage and administer the Fund.
Does the NZ Government influence investment decisions?
No. The Act which established the Guardians and the Fund made the Guardians operationally autonomous from the Crown. This means that the Government does not decide who can be nominated for the Guardians’ Board, nor does it have any role in the Guardians’ investment decisions. The Government can only direct the Guardians as to the level of risk and return in the Fund.
Why don't you invest more of the fund in New Zealand?
While we actively seek opportunities to invest in New Zealand, and believe we do have a home-town advantage that makes it worthwhile investing a significant proportion of the Fund here, all our investment decisions are made a commercial basis. In global terms New Zealand is very small investment market, and it is important that the Fund is appropriately diversified. New Zealand investments therefore need to stack up against all the alternative investment options that are available to us globally. We expect the Fund's New Zealand investments to deliver a premium return in order to compensate for the risk of concentrating too much of the Fund here. As one of the few institutional investors of scale in New Zealand, we also maintain a high level of price discipline.
Is the expectation that the Fund will exceed the Treasury Bill return 2.7% too easy a performance benchmark?
We have made clear that T-Bills + 2.7% is the rate of return we expect to be able to average over rolling 20-year periods. We aspire to outperforming the +2.7% whenever we have the opportunities to do so. For further details see our Perfomance section.
Why do you report your investment returns inclusive of NZ tax?
Returns are reported net of all costs and overseas tax. As the Fund is a Crown asset, we consider NZ tax paid a return to the Crown i.e. it is part of our total return.
Do you manage individual retirement accounts?
No - we only invest Government contributions.
How do you assess whether unlisted ‘private markets’ assets are adding value?
As a general principle, we require all investments to be valued at fair value. In the case of listed assets, fair value is readily determined by reference to traded prices on recognised exchanges. For unlisted ‘private markets’ assets, where quoted market prices are not available, fair value will be determined on the basis of independent valuations, where practical.
Where it is not practical to obtain an independent valuation, an investment manager’s valuation will be used. If we are not satisfied that an investment manager’s valuation is sufficiently reliable, we will value the investment at cost less any impairment. We ensure that any independent valuations are conducted at least annually by qualified independent professional advisors.
Before valuations are booked, the valuation methods used by the advisors are tested by an internal Valuation Working Group, comprising senior members of the Investments and Finance teams.
What impact has the suspension of contributions had on the size of the Fund?
See Contributions Suspension for an estimate.
Do the Guardians and Fund donate to charity or undertake sponsorships?
The Guardians undertake a limited number of sponsorships in New Zealand. Current sponsorships include:
- AUT Centre for Financial Research - Auckland Finance Meeting - Award for Best Paper - 2012, 2013, 2014
- New Zealand Financial Literacy Summit - 2011, 2013
- WriteMark Plain English Awards - Best Plain English Investor Document - 2011, 2012, 2013; Best Plain English Annual Report - 2014
- RIAA Annual New Zealand Responsible Investment Briefing - 2013, 2014
- RIAA Annual Benchmarking Report - 2014
For information on the Guardians' approach to sponsorship please refer to our Communications Policy.
Payroll giving is offered to staff on an opt-in basis, and the proceeds of an annual auction of corporate gifts to Guardians' staff members are donated to charity.
Who pays the cost of running the Fund?
Guardians and Fund expenses are met by the Fund and paid for out of investment returns, with the exception of a small annual appropriation from Parliament to meet Board expenses and for audit fees. For more information see the Cost section and our Annual Reports.
How can I get a job working for the Guardians?
All our recruitment is undertaken via specialist search. We also run a summer intern programme. For more information see our Management section.