Profit leap for super fund

The Government Superannuation Fund has recorded an operating profit of $316 million for the year to June 30.

Last year the fund returned a $33 million profit after losing heavily on the international stock market in previous years.

The authority administering the fund said the return on investments after tax and before payouts to members was 10.16 per cent.

This compared with a 9.66 per cent benchmark return of 86 other superannuation schemes.

The fund is the old superannuation scheme for public servants that has been closed to new entrants since 1992. Its combined membership of contributors and beneficiaries is 71,414.

The scheme, which was considered generous when it was closed off to new members, is a continuing drain on the Government's books as it has to top off the shortfalls between what the fund earns and the amount it pays out.

In the year ending June, the Government contributed $502 million towards benefit payments of $727 million. Members paid in $83 million.

The fund currently has an unfunded liability of future payments (outside Government top-ups) of $10 billion.

Chairman Basil Logan said he was confident the fund would achieve its medium- to long-term objective to outperform an equivalent investment in Government Stock.

- NZPA