Proposed changes to state sector legislation should not apply to the Crown entity that manages the NZ Super Fund, Catherine Savage, the Chair of the Guardians of New Zealand Superannuation, told a meeting of the Governance and Administration select committee at Parliament today.

Ms Savage was speaking in support of the Guardians’ submission on the State Sector and Crown Entities Reform Bill.

Ms Savage said like State Owned Enterprises, the Bill should not apply to the Guardians. “Like a State Owned Enterprise, the Guardians and Fund has a commercial focus. In order to be successful in the commercial world the Guardians must operate at arm’s length from the Crown.”

“While we respect the Government’s right to be consulted, and are committed to transparency and accountability regarding our decisions, it is important that the final decision over CEO appointments and remuneration rests with the Board.”

“All New Zealanders have an interest in the long-term success of the NZ Super Fund, given the important role it will play in helping to pay for superannuation payments in the future. While based in New Zealand, the Guardians invests globally, and it is imperative that we are able to attract and retain the very best executive and other talent needed to sustain the Fund’s success.”

“Removing the fundamental responsibility for appointing and remunerating the CEO from the Board, as provided for in the proposed Bill, undermines our accountability for delivering results. It also opens up the possibility of political interference and short-term decision making.”

Ms Savage noted that remuneration for all Guardians staff, including the CEO, was paid for from the Fund, not from Parliamentary appropriation.

In the 15 years since it was set up, the Fund has made an annual return of 10%. The Fund has paid more than $6 billion in tax over this same period, and has grown to be over $38 billion in size.

“We look forward to ongoing engagement with the State Services Commissioner and other stakeholders on these important issues,” Ms Savage said.

ENDS

For more information:

Guardians’ submission:  https://www.nzsuperfund.co.nz/publications/submissions