17 August 2004

Expert appointed for 1st review of Board of NZ Super

The government has appointed investment and business consultant Jonathan Eriksen to conduct the initial independent review of the Guardians of New Zealand Superannuation.

The legislation establishing the Fund provides for periodic reviews every five years of the Board’s performance: a provision reflecting the importance of the Fund to the future viability of New Zealand Superannuation and to the security in retirement of New Zealanders.

Mr Eriksen tendered for the job. He will prepare a written report to be tabled in the House by the end of the year.

Announcing the appointment, Dr Cullen said Mr Eriksen had the necessary skills and competencies to do the work.

He has previously advised the Earthquake Commission on investment and corporate governance issues and the Russian government on pension fund reform.

Attached: Terms of reference for the review.
Terms of reference.

The outcome sought from the review is an assessment of whether the Guardians are complying with best practice across all aspects of the Fund’s operations to ensure optimal performance in the future. The reviewer will be expected to:

A. Form an opinion about whether or not the investment policies, standards, and procedures, established by the Guardians are appropriate to the Fund; and whether or not the investment policies, standards, and procedures, established by the Guardians have been complied with in all material respects.

B. Form an opinion as to whether the Guardians’ operations across all aspects of their organisation represent best practice, as appropriate to the New Zealand Superannuation Fund.

C. Form an opinion on the investment performance of the Fund to 30 June 2004.

D. Form an opinion on whether the Guardians are satisfactorily positioned to meet their objectives under the Act in the future.

E. Identify anything else you consider relevant to the performance of the Guardians and the New Zealand Superannuation Fund.

Priorities for the review 1. Best practice – definition and assessment.

2. The statement of investment policies, standards and procedures.

3. Internal controls and systems, risk management, reporting and auditing.

4. Governance / Accountability across the organisation. Performance management of the Board and Management.

5. Third party performance management including mandates and monitoring.

6. Expenditure. Operational expenditure and expenditure charged against the fund, in particular fund manager and custodian fees.

ENDS

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