No excuse for poor super fund performance

Green co-leader Rod Donald today called for a change in investment strategy for the Government Superannuation Fund following massive losses on the international sharemarket.

The first year report for the Government Superannuation Fund Authority, which controls the savings of current and former public servants, show the fund has lost $240 million in its overseas share dealings for the eight months to June.

This represents a 2.55 per cent pre tax loss for the period October to June, compared to a 3.1 per cent profit for the previous four months when the fund was still invested in New Zealand fixed interest bonds.

"The net effect of the Government's gamble is that the fund is now worth $207 million less than it was at the start of the year and $248 million less than the Government was forecasting," said Mr Donald.

"This is the first time in the history of the GSF that it has lost money. The justification in the report that the losses were less than the losses of other major superannuation funds is a poor excuse.

"This fund was invested on the share market after September 11, Enron and WorldCom - when all the other funds were pulling back. I want the Government to tell us how long it will take to recover these losses, let alone reach the projected returns of 9.6 per cent," he said.

"Now is not the time to be sinking public money into fragile global markets. Yet incredibly the authority that controls this fund wants to lift its holding in international shares from 33 per cent to 52 per cent.

"I urge the Government to say enough is enough, admit their mistake and reinvest this money back into the New Zealand economy before it loses any more."

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