Bill must guide super guardians, MPs told

Guidelines on socially responsible investing should be included in superannuation legislation, says the Commonwealth Group.

Spokesman Michael Hill told Parliament's finance and expenditure select committee, which is considering the New Zealand Superannuation Bill, that legislation on how the fund was invested needed to be as clear as possible.

Under the bill, Government surpluses would be set aside over the next 25 years to partly fund increasing demands on superannuation.

The fund would be run by politically appointed guardians who would be independent of direct political control.

The bill instructs the guardians to manage the fund so as not to damage New Zealand's reputation as a good international citizen.

Mr Hill said: "The legislation should instruct the guardians to develop sustainable economic, social and environmental outcomes from investments that would enhance New Zealand's reputation."

The potential size of the Superannuation Fund - $50 billion over 25 years - meant its approach to socially responsible investing was likely to create a benchmark for the rest of the New Zealand investment market, he said.

AMP financial services managing director John Drabble told the committee that the bill had the potential to give New Zealanders confidence they would receive a pension equal to present levels when they retired.

"We are also encouraged that the fund will be commercially managed at arm's length."

But Mr Drabble was concerned at the perception some people had that they would not need to save extra themselves as the fund would give them the retirement they wanted.

"The bill entrenches the present level of NZ Superannuation which, we reiterate, provides a very basic level of retirement income," he said.

An AMP survey had shown people aspired to a retirement lifestyle that NZ Superannuation would not provide.

- NZPA