Fund runs up more big losses

By FRANCESCA MOLD

Managers of the Government Superannuation Fund will face a grilling at a parliamentary select committee this week after it was revealed they have lost another $138 million on the overseas sharemarket.

Figures released to the Green Party by Finance Minister Michael Cullen show the seven-member authority that manages the fund racked up sharemarket losses totalling about $380 million in the 14 months to December.

The latest $138 million loss occurred between July and December.

Green co-leader Rod Donald said the authority should be disbanded.

Public-service pensions should be put back under the control of a government department - a system which had operated profitably in the past.

The fund receives contributions from 22,000 state employees and pays pensions to 53,000 former employees. It has assets of between $3 billion and $3.5 billion.

Mr Donald said that had the money been invested in government bonds, it would have earned an additional $45 million on top of the $380 million that had now been lost in the sharemarket gamble.

"Even if the shares now miraculously earned the 9.6 per cent return forecast by the authority, it would take nearly three years to recover the losses," Mr Donald said.

"Dr Cullen cannot be allowed to continue gambling public servants' savings away."

The fund board will meet today to discuss its investment strategy and whether it should put its money into New Zealand sharemarkets rather than the volatile international markets.

Board chairman Basil Logan and member David May will have to explain their strategy and the sharemarket losses when they appear before the finance and expenditure committee on Wednesday.