Wednesday, June 19, 2024

New superannuation Bill to hatch investment opportunity

Finance Minister, Nicola Willis, has welcomed the passage of legislation set to give the New Zealand Superannuation Fund a wider range of investment opportunities.

The New Zealand Superannuation and Retirement Income (Controlling Interests) Amendment Bill passed its third reading in Parliament today.

“The bill removes a section in the original act that prohibited the fund from taking a controlling interest in an entity,” said Minister Willis.

“The change reflects the fund’s growing maturity and will give the fund’s manager the flexibility it needs to manage direct investments in line with global best practice.”

Ms Willis said the original New Zealand Superannuation and Retirement Income Act reflected the newness of the fund and the relatively small exposure to direct investments that was considered best practice in 2001, but the prohibition was no longer required.

“Over the past 20 years, the fund has proven its ability to successfully implement a sophisticated investment strategy. At the same time, direct investment is now widely recognised as being consistent with best-practice portfolio management in a way that it wasn’t when the fund was established,” she said.

The amendment bill does not change the fund’s mandate. It is still required to invest on a prudent commercial basis, said the Minister.

“This legislation will allow it to leverage its intergenerational endowments and long-term horizon to potentially access a wider pool of viable investment partners and opportunities, particularly in New Zealand.”

The amendments to the Act will come into force the day after the bill receives the Royal assent.

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