Super Fund rebounds to reach record high

In the May Budget Finance Minister Bill English announced the Government would suspend payments to the fund for up to 11 years. Photo / Mark MItchell

The New Zealand Superannuation Fund has recouped its billion dollar losses - growing by more than 33 per cent since March - and broken even despite the Government putting a hold on its contributions.

In an unprecedented move the Super Fund, known as the "Cullen Fund", yesterday released its performance figures for the rest of the financial year to June 30 and for the July and August period.

The fund does not normally release the figures until its annual report is tabled in Parliament usually about October.

But a spokesperson said it had decided to go public with them earlier because of strong interest in its performance.

"The reasons for the release is that the minister has already seen the 30 June numbers, plus we acknowledge that there is considerable interest in the performance of the fund to 30 June [and since]."

The figures show its investment returns plummeted 22.14 per cent in the year to June.

Its worst month was in October last year when it fell 13.51 per cent, knocking more than $1.5 billion off the fund in a single month in the wake of the collapse of investment bank Lehman Brothers.

The fund hit its lowest point in February when it fell to $11.2 billion, down from the $14.7 billion high it reached in May last year.

But since March it has grown 33.34 per cent from the market bottom.

Its biggest monthly growth so far this year was in April when it grew 6.74 per cent.

In July the fund was up 6.31 per cent and last month it was up 2.8 per cent.

But it is only in the last couple of weeks that the Super Fund has managed to break even on the contributions the Government has made since the fund was set up in 2003.

Up to August 31 the taxpayer had put $14.88 billion into the fund. The fund hit $14.86 billion at the end of August but as of September 17 unaudited figures show it is now worth $15.3 billion - its highest level.

Paul Richardson, chief investment officer at BT Funds Management, the fund management arm of Westpac, said while the growth was no surprise given the market rally since March, it was "obviously very encouraging for New Zealand taxpayers".

In the May Budget Finance Minister Bill English announced the Government would suspend payments to the fund for up to 11 years - until the country had an operating balance sufficient to meet contributions.

It was to contribute $1.5 billion to the fund this year but will instead invest just $250 million.

The Labour Government set up the fund in 2003 to help pay for the superannuation costs of the retiring baby boomer generation.

HIGHS AND LOWS
What the taxpayer has put in: $14.88 billion

What the fund was worth as of September 17: $15.3 billion

How much it shrunk in the year to June 30: 22.14 per cent