This output class provides superintendent services, investment management and scheme management services for the Government Superannuation Fund (GSF).

Outputs in this class are:

policy advice on the operation of the GSF;
exercise of the statutory powers of the Superintendent of the GSF;
management of the contract between the Crown and the Administrator of the GSF schemes; and
management of the investment and custody of the portfolio of the GSF.

A key activity for 2000/2001 is to implement the Government's decision to change the governance of the GSF and to extend the range of financial instruments that the GSF may invest in.

Quantity, Quality, Timeliness and Cost

Details of performance relating to performance measures for generic standards and measures for policy advice provided by the Ministry of Economic Development for this Vote (Quantity, Quality and Timeliness) can be found in the Statement of Objectives and Statement of Service Performance.

(Performance standards are in brackets where applicable.)

Specific deliverables relating to the agreed work programme are as follows:

Work Programme

All policy advice projects were delivered in accordance with the terms of the work programme as agreed with the Minister.

Schemes Management

Exercise of Statutory Powers

Quantity

Number of cases for determination (demand driven; estimates in brackets):

491 (300) cases were referred to the Superintendent for determination by the Scheme's Administrator.

Quality

Compliance with the Act and Regulations and with published policies - 86% (90%) of all decisions referred to the Appeals Board were upheld. (The Appeals Board disagreed with the Superintendent's decision in one of the seven appeals handled during the year.)

Timeliness

Cases referred to the Superintendent for determination by the Scheme's Administrator:

95% (90%) were determined and AXA New Zealand Limited advised within five working days of receipt; and
100% (100%) were determined and AXA New Zealand Limited advised within one month of receipt.

Contract Management

Quantity

Comprehensive management of the administration contract - all contractual requirements were met as evidenced in monthly and quarterly reports.

Quality

The Scheme's Administrator complied with the contractual provisions. A performance review conducted by Deloitte Touche Tohmatsu did not highlight any major issues.

Timeliness

Advice to the Minister on non-compliance is to be provided within five working days.

There were no instances of non-compliance.

Investment Management

Quality

All GSF assets, valued at $3.4 billion were invested in accordance with the Minister's investment policies (100% compliance at Investment Committee Review).

The return achieved on Fund assets for the year to 30 June 2001 exceeded the agreed modified benchmark of meeting the Credit Suisse First Boston Government Trading Bonds Index (7.57% return versus the benchmark of 7.00%).

Timeliness

Six-monthly reports on compliance and performance were submitted to the Minister on 18 (20) October 2000 and 20 (20) February 2001.

Projects Not Included in the 2000/2001 Departmental Forecast Report

Under the GSF Amendment Bill 2001 there will be a change of governance for the GSF and the GSF will move from the Ministry to a new Crown entity to be called the GSF Authority Board. This move is expected to occur in early October 2001.

Preparation work for the transition of the GSF from the Ministry to the new Crown entity has been undertaken.

A GSF Establishment Board was implemented. The Board recommended to the Minister an asset allocation strategy and the appropriate arrangements for managing and administering the GSF and the GSF schemes, and for providing secretariat services to the GSF authority.

Cost

(Figures are GST exclusive)

	2001 Main Estimates	2001 Supple- mentary Estimates	2001 Actual	2000 Actual
	$000	$000	$000	$000
Revenue:
Crown	4,240	5,926	5,666	1,583
Other	1,488	1,502	1,727	1,886
Total Revenue	5,728	7,428	7,393	3,469
Expenses:
Annual appropriations	5,728	7,428	7,393	3,390
Other appropriations	-	-	-	-
Total Expenses	5,728	7,428	7,393	3,390
Net Surplus/(Deficit)	-	-	-	79

Sources of Revenue Other

	$000
Inter-departmental Revenue	1,266
Rental from sub-let of office space	426
Miscellaneous	35
	1,727

Major Budget Variances

The Supplementary Estimates adjustments provides for a transfer of funds from Vote: Commerce D1 - Policy Advice: Business and Competition ($300,000), Vote: Commerce D3 - Policy Advice and Administration of Trade Remedies ($80,000) and Vote: Communications D1 - Policy Advice Communications ($90,000) and an increase in funding ($1,216,000) to meet the transitional costs associated with the transfer of functions from the Ministry of Economic Development to the new Crown Entity Government Superannuation Fund New Zealand (GSFNZ).

In addition to the changes referred to above, the difference between 1999/2000 and 2000/2001 also reflects a one-off payment to the Government Superannuation Fund to offset funding previously recovered from the fund that was not consistent with legislation and future funding to ensure that operating expenses are net in accordance with the GSF Act.

The variance between Actual and Supplementary Estimates for Revenue Other reflects fees paid by government departments being greater than anticipated. This additional revenue was fiscally positive for the Crown.

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Printed: 25/11/2009