Fund Provides information on Indirect Investments

Reserve Bank of New Zealand Staff Superannuation and Provident Fund

Media Release

RBNZ Superannuation and Provident Fund Provides information on Indirect Investments

The Reserve Bank of New Zealand Staff Superannuation and Provident Fund is a small superannuation scheme that provides retirement and related benefits for current and former Reserve Bank staff. The scheme is established under its own trust deed, and is not subject to direction on any matters by the Reserve Bank or the Minister of Finance. All trustees operate, as required by law, in the best interests of members.

The fund is predominantly invested in New Zealand fixed interest securities. However, it also has some exposure to international equities through its holdings of two overseas collective investment vehicles used by its New Zealand investment management firm. The vast majority of these international exposures are via a passive index fund meaning that the underlying composition of the fund changes to mirror the listed companies that make up the relevant equity market. The trustees have no control or influence over the individual stock selection in either of the passive or active funds.

In the last few days, Trustees have discovered that one of those widely-diversified funds holds shares in two US companies – General Dynamics and Textron – which may be involved in the production of cluster munitions. Trustees will act expeditiously to eliminate our exposure to these firms. The Bank has requested that Trustees adopt a socially responsible investment policy and we will consider the matter at our next meeting.

Other investments by the RBNZ Superannuation and Provident Fund through its collective investment vehicles in companies on the NZ Superannuation fund exclusion list are (amounts attributable to the Reserve Bank Superannuation Fund in brackets): KT&G Corp ($24,182.50); Philip Morris International In ($44,925.66); Altria Group Inc ($38,374); British American Tobacco PLC ($34,630.20); Honeywell International ($24,334.73); Lockheed Martin Corp ($19,654.98); Imperial Tobacco Group PLC ($14,975.22); Japan Tobacco Inc ($12,167.37); Reynolds American Inc ($12,167.37); General Dynamics ($11,231.42); Northrop Grumman ($10,295.46); Barrick Gold Corp ($7,487.61); Freeport-McMoRan Inc ($4,679.76); Textron Inc ($2,807.85); and Fluor Corporation, Jacobs Engineering Group, Swedish Match AB, and Tokyo Electric Power Company (all $1,871.90).

Geoff Bascand

Chair of Trustees

2 September 2016

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