|
|
|
|
 |
|
National Provident Fund
"Only Russell has the intellectual horsepower to model all these issues and advise the board."
Spokesperson: Alan Langford, Chief Executive, National Provident Fund
One of New Zealand's largest superannuation funds, the National Provident Fund, has been a Russell client since 1993. Russell acts as advisory consultant to the Fund, providing advice on manager selection, risk management and asset allocation for each of the 15 NPF schemes.
Alan Langford, Chief Executive, says that the Fund dates back to 1910 when the government decided to promote retirement saving facilities for the private sector. Since then, the NPF has responded to various needs for superannuation in the market and now contains a diverse array of schemes varying in size from under $5 million to over $500 million.
NPF has a pooled arrangement, the Global Asset Trust ("GAT"), which holds all investments on behalf of the schemes. "The GAT includes 5 main asset classes," says Alan. "Each scheme invests in the GAT according to its asset allocation."
This may seem fairly straightforward, but Alan says there are several confounding factors that make the NPF more difficult to manage than most super funds. Firstly, a government decision to limit increases in commercial risk (the government guarantees scheme benefits) means the NPF schemes were closed to new members in March 1991.
Another factor is the need to manage the Crown's risk under the guarantee. "One of the things we have worked on with Russell is to try and quantify what the level of risk is for the Crown, and what is the probability that the Crown will have to make a payment under the guarantee," says Alan.
A third factor affecting some of the schemes is a requirement to credit members with an earning rate of at least 4% pa, after tax and expenses, regardless of the level of investment returns. "Now that is quite a challenge when interest rates are sitting around 6-7%," says Alan. "The difficulty is to manage the schemes to ensure they are able to credit that 4%, regardless of the return. Through the advice of Russell we have introduced appropriate asset allocations and a crediting and reserving policy to build up reserves to manage the crediting obligation."Alan is pleased with the way Russell has handled these challenges. "What we have found is that in New Zealand, only Russell has the intellectual horsepower to model all of these issues and advise the Board on the appropriate asset allocations and investment strategies. Government officials also have a high respect for Russell. They accept Russell's analysis as being robust and credible."
|
|
|
| |
MORE Testimonials |
|
|
|
Terms of Use.
Privacy Statement.
Products and services described on this website are intended for persons in New Zealand only. Information on this site should not be considered a solicitation to buy or an offer to sell a security to any person. Persons outside New Zealand may find more information about products and services available within their jurisdictions by going to Russell's Worldwide site.
|
