Minutes of a
BOARD OF TRUSTEES OF THE NATIONAL PROVIDENT FUND
meeting of
(the
Board)
Venue
Level 12 | The Todd Building | 95 Customhouse Quay | Wellington 6011
Date
Tuesday, 25 February 2020 commencing at 8.30 am
PRESENT
Mr E Schuck (Chair)
Mr D Mussett
Mr W Stechman
Mr S Ward
Ms L Edwards
Ms S Park
IN ATTENDANCE
Mr S Tyler
Ms P Drury
Mr P Bevin
Messrs K Poore, s9(2)(a)
and Ms N Rumsey (for the Investment
items)
Messrs s9(2)(a)
from Treasury joined the
meeting from 9.15 am to 9.55 am
APOLOGIES
Nil
Th
e Board initially met in the absence of Management.
All
Board members confirmed there were no specific interests to declare.
1.
MINUTES OF THE BOARD MEETING
Th
e Board
NOTED and
AGREED the minutes of the Board meeting held on 5 December 2019
subject to the addition of a new clause at agenda item 3.5 (f) as follows:
REQUESTED Management review the case for active versus passive investment as an
s9(2)(j)
later this year.
2.
ADMINISTRATION
2.1 Matters Arising
The Board:
RELEASED UNDER THE OFFICIAL INFORMATION ACT
(a)
NOTED the Matters Arising.
(b)
NOTED there is a Russell seminar in Wellington on 25 March 2020, the day after the next
Board meeting.
(c)
REQUESTED the CEO circulate to the Board the details of the Centre for Investor
Education Major Market Players Conference in Australia later this year.
2.2 Long Term Work Calendar
The Board
NOTED the Long Term Work Calendar.
1
2.3 Interests Register
The Board
NOTED the Interests Register.
2.4 Treasury
The Board:
(a)
WELCOMED Messrs s9(2)(a)
to the meeting at 9.15 am.
(b)
RECEIVED comment from s9(2)(a)
regarding the content of the annual Letter of
Expectations from the Minister of Finance dated 22 October 2019, including the
messaging around responsible investment and the information gathering requirements of
Treasury, noting the Government’s heightened interest in responsible investment, the
changing nature of best practice (particularly decarbonisation) and the passage of the
zero carbon bill.
(c)
CONFIRMED NPF’s fiduciary duty is to maximise returns to members and this, together
with the different statutory responsibilities from other CFIs, has resulted in a slightly
different approach being taken by NPF to responsible investment, e.g. NPF does not
exclude investment in tobacco.
(d)
DISCUSSED responsible investment generally, the Board’s awareness of the Crown’s
view, noting the market is pricing in carbon risk. NPF’s active managers are best placed
to respond to this risk and currently s9(2)(a)
(e) Treasury
DISCUSSED:
- Their information gathering initiatives, noting the overall objective is to enhance
reporting to the Minister of Finance. A series of workshops is being held with CFIs.
At the first workshop the CFIs suggested using scenario analysis as an appropriate
way to frame information gathering – e.g. the effect of shocks and the flow on effect
on Crown fiscal issues.
- The intention is to design the information gathering programme first, then consider
whether adoption of IT based solutions may increase efficiency.
(f)
The Chairman
THANKED Messrs s9(2)(a)
for joining the meeting. Messrs s9(2)(a)
left the meeting at 9.55 am.
3.
KEY PAPERS
3.1 Chief Executive’s Report
The Board:
RELEASED UNDER THE OFFICIAL INFORMATION ACT
(a)
NOTED the Report.
(b)
DISCUSSED responsible investment and
REQUESTED ongoing updates on responsible
investment to future Board meetings.
(c)
The Chair
CONFIRMED approval for his electronic signature to be appended to the
response to the annual Letter of Expectations.
(d)
REQUESTED regular reporting to the Board on exposure to fossil fuels.
2
3.2 Health, Safety and Wellness Update
(a)
DISCUSSED the report.
(b)
REQUESTED a note be added to the report confirming EAP services are in place and
available to Annuitas staff.
3.3 Global Equities - Replacement for s9(2)(j)
The Board:
(a)
NOTED and
DISCUSSED the report, including:
-
s9(2)(i)
-
s9(2)(i)
-
s9(2)(i)
(b)
APPROVED s9(2)(i)
strategy replacing s9(2)(i)
(c)
NOTED the target capital allocation is an equal weighting to all managers. That capital
allocation gives an active risk allocation of s9(2)(i)
(d)
NOTED the transition from
s9(2)(i)
will use the transition
manager, s9(2)(i)
.
(e)
AUTHORISED Management to agree the fees for the transition with s9(2)(i)
.
(f)
APPROVED Management executing the Investment Management Agreement with
s9(2)(i)
under Common Seal subject to receipt of appropriate
legal sign off.
(g)
NOTED transition will take place as soon as the legal documentation is in place.
3.4 NPF Dynamic Asset Allocation Review
The Board:
RELEASED UNDER THE OFFICIAL INFORMATION ACT
(a)
NOTED all the recommendations from the 2016 DAA Review have been implemented.
(b)
NOTED DAA performance has been s9(2)(i)
since the last review.
(c)
NOTED DAA risk has also been s9(2)(i)
since the last review.
(d)
NOTED internal control of the DAA programme remains the best approach in
Management’s view.
(e)
APPROVED continuation of the current DAA programme.
(f)
APPROVED s9(2)(i)
3
(g)
NOTED Management has provided a copy of the review to s9(2)(i)
and will
circulate their opinion to the Board once received.
3.5 Annuitas Management Limited – Appointment of Director The Board:
(a)
CONFIRMED Mr Ward as the Board’s representative on the Board of Annuitas
Management Limited effective 1 March 2020.
(b)
APPROVED Mr Schuck signing the attached notice of appointment of director under
clause 8.3(c) of the Annuitas constitution advising Annuitas and the Government
Superannuation Fund Authority of Mr Ward’s appointment.
(c)
CONFIRMED Mr Schuck and Mr Ward as the Board’s representatives at the Annual
General Meeting of Annuitas Management Limited to be held in around November 2020.
(d)
NOTED the current Chair of Annuitas Management Limited is Mr Schuck. Ms Anne
Blackburn from the Government Superannuation Fund Authority will become Chair of
Annuitas for 12 months from the day after the date of the Annual General Meeting in
November 2020.
s9(2)(i)
s9(2)(i)
s9(2)(i)
s9(2)(i)
s9(2)(i)
s9(2)(i)
s9(2)(i)
4. INVESTMENTS
4.1 Quarterly Investment Report
The Board:
(a)
NOTED and
DISCUSSED the report, including:
- Returns for the quarter to December 2019.
- Performance is behind expectations for the E and A Units.
- Reserve levels for schemes with risky assets have increased.
(b)
RELEASED UNDER THE OFFICIAL INFORMATION ACT
DISCUSSED:
- s9(2)(j) performance continues to disappoint.
-
s9(2)(j) is also highly regarded by s9(2)(j)
.
-
s9(2)(j)
s9(2)(j)
-
s9(2)(j)
(c)
AGREED a zoom presentation will be organised with the Board and AQR at a future
Board meeting this year.
4.2 Investment Update
4
The Board
NOTED and
DISCUSSED the report.
4.3 Review of Custodian, Securities Lending, Class Actions, FX, Proxy Voting and
Transition Manager
The Board
NOTED the report and that a similar update will be provided to the Board on an
annual basis.
4.4 Investment Road Map Feb 2020
The Board
NOTED and
DISCUSSED the report.
4.5 Sydney Travel Report – s9(2)(a)
The Board
NOTED and
DISCUSSED the report.
4.6 Minutes of the Investment Committee
The Board
NOTED the draft minutes of the Investment Committee meeting held on 11
February 2020.
5.
SCHEMES
5.1 Schemes Update
The Board
NOTED the report and
DISCUSSED the recent change in personnel.
6.
FINANCE
6.1 Scheme (GAT) results to 31 December 2019
The Board
NOTED the report incorporating the Scheme Financial Statements for the nine months
to 31 December 2019.
6.2 Board of Trustees and Board Reserves Financial Statements
The Board:
(a)
NOTED the financial statements of the Board of Trustees for the nine months to 31
December 2019.
(b)
NOTED the financial statements of the Board Reserves, for the nine months to 31
December 2019.
RELEASED UNDER THE OFFICIAL INFORMATION ACT
6.3 Annuitas Management Limited Financial Statements The Board
NOTED the financial statements of Annuitas Management Limited for the six
months to 31 December 2019.
7.
PAPERS FOR NOTING
7.1 Minutes of the ALCO Committee Meeting
5
The Board
NOTED the minutes of the ALCO Committee meetings held on 21 November 2019
and 23 January 2020.
RELEASED UNDER THE OFFICIAL INFORMATION ACT
6
8.
DELEGATED DECISIONS
8.1 Board of Trustees of the National Provident Fund - Common Seal The Board
NOTED there had been no use of the Common Seal of the Board of Trustees of the
National Provident Fund for the period 27 November 2019 to 11 February 2020.
8.2 Documents signed on behalf of the Board
The Board
NOTED no documents had been signed on behalf of the Board during the period 27
November 2019 to 11 February 2020.
8.3 Management Decisions made under Delegated Authority
The Board
NOTED Management’s delegated decisions during the period 27 November 2019 to
11 February 2020.
9.
OTHER BUSINESS
There was no other business.
The meeting finished at 11.55am.
NEXT MEETING: The next meeting of the Board is scheduled to commence at 8.30am on the
24 March 2020 in Wellington.
RELEASED UNDER THE OFFICIAL INFORMATION ACT
7
Minutes of a
BOARD OF TRUSTEES OF THE NATIONAL PROVIDENT FUND
meeting of
(the
Board)
Venue
Video Conference via Zoom
Date
Tuesday, 24 March 2020 commencing at 8.30 am
PRESENT
Mr E Schuck (Chair)
Mr D Mussett
Mr W Stechman
Mr S Ward
Ms L Edwards
Ms S Park
IN ATTENDANCE
Mr S Tyler
Ms P Drury
Mr P Bevin
s9(2)(a)
(for the Investment items)
APOLOGIES
Nil
Th
e Board initially met in the absence of Management.
All
Board members confirmed there were no specific interests to declare.
Th
e Board meeting commenced at 8.45 am.
1.
MINUTES OF THE BOARD MEETING
Th e Board
NOTED and
AGREED the minutes of the Board meeting held on 25 February 2020
subject to a minor change to the wording of agenda item 2.4 (c)
.
2.
ADMINISTRATION
2.1 Matters Arising
The Board
NOTED the Matters Arising.
2.2 Long Term Work Calendar
The Board
NOTED the Long Term Work Calendar.
2.3 Interests Register
RELEASED UNDER THE OFFICIAL INFORMATION ACT
The Board:
(a)
NOTED the Interests Register.
(b)
REQUESTED the Interests Register be updated to reflect Mr Stephen Ward’s appointment
to the Board of Annuitas Management Limited.
(c)
NOTED s9(2)(a)
role as a director of s9(2)a)
is ending shortly.
1
3.
KEY PAPERS
3.1 Chief Executive’s Overview
The Board:
(a)
NOTED the report.
(b)
NOTED the Annuitas office is closed from 24 March 2020 and staff have been provided
with sufficient equipment to enable them to work remotely from home.
(c)
REQUESTED the CEO send a brief weekly update to the Board each Friday (and more
frequently if there is a significant event) until further notice.
(d)
NOTED the Treasury information project has been put on hold.
3.2 Health, Safety and Wellness Update
(a)
DISCUSSED the report.
(b)
NOTED the CEO has flexibility to adjust sick leave entitlements should this be required
in the current environment and some leave balances may remain higher than normal.
3.3 Small Cap Equities The Board:
(a)
NOTED and
DISCUSSED the report, including:
-
s9(2)(j)
-
s9(2)(j)
s9(2)(j)
-
s9(2)(j)
s9(2)(j)
-
Small cap is defined by MSCI as the index provider and includes stocks with a
market cap of between $33 million - $10 billion.
-
NPF effectively has a small cap exposure through its investment in NZ equities.
-
The comments on the s9(2)(j)
on measurement of the small cap
premium and the identification of persistent factors (eg value, market, size,
momentum, quality/defensive).
-
The “January” effect – year-end tax loss selling and “window dressing” by managers
electing to sell what did poorly and buy what did well.
-
Investment managers’ discretion and s9(2)(j)
their ability to add value
to the portfolio.
(b)
3.4
Responsible Investment: Climate Risks
RELEASED UNDER THE OFFICIAL INFORMATION ACT
The Board:
(a)
NOTED and
DISCUSSED the report.
(b)
AGREED:
-
whilst the Board is not looking to change its responsible investment policy at this
time, responsible investment remains a key matter for consideration by the Board
and will remain on the agenda for future meetings.
-
The effect ESG factors have on the risk and return characteristics of the portfolio is
acknowledged. Active managers take ESG factors into account when investing.
2
-
Some activities are illegal and these are filtered and excluded from the portfolio. At
this stage no further filters or exclusions are required to exclude further stocks from
the portfolio.
3.5 NPF Expense Budget 2020/21 The Board:
(a)
REVIEWED and
DISCUSSED the report, in particular the expenses for investments,
professional advice and travel.
(b)
REQUESTED clarification of the assumptions with respect to dividends and imputation
credits.
(c)
APPROVED the budget for the year to 31 March 2021 as presented, s9(2)(i)
3.6 Lump Sum Cash Accumulation Scheme – Change to Annual Withdrawal
Frequency
The Board:
(a)
NOTED the report and the member request.
(b)
APPROVED the number of partial withdrawals a year from the Lump Sum Cash
Accumulation Scheme being increased from 2 withdrawals to 4 withdrawals per annum.
3.7 Cash Fund – Withdrawal from ANZ Bank New Zealand Limited and Termination
The Board:
(a)
NOTED the report.
(b)
APPROVED the termination of the direct investment by the Cash Fund with ANZ Bank
New Zealand Limited.
(c)
NOTED following this termination, AMP will be the sole investment manager for the Cash
Fund.
4. INVESTMENTS
4.1 Investment Update
The Board:
(a)
NOTED and
DISCUSSED the report, including:
RELEASED UNDER THE OFFICIAL INFORMATION ACT
- Estimated returns tabled for the period to 20 March 2020, noting the estimated return
for the Fund as a whole from 1 March to 20 March 2020 is -9.2%, the return for the
FYTD to 29 February 2020 is 4.2% and the estimated return for the FYTD to 20 March
2020 is -5.4%.
- T Rowe Price will assume control of their portfolio from 26 March 2020.
(b) Managers may hold s9(2)(i)
bonds but the exposure is limited. The
s9(2)(i)
includes some emerging market debt which is s9(2)(i)
(c)
DISCUSSED DAA, the current rules based tilting programme and the actions taken to
date.
3
(c)
REQUESTED an Investment Committee meeting be scheduled around 21 April 2020
(immediately after the ALCO meeting for April) to review the next DAA steps.
4.2 Antipodes on Market Impact of Covid-19
The Board
NOTED and
DISCUSSED the article from Antipodes.
5.
SCHEMES
5.1 Schemes Update
The Board:
(a)
NOTED the report.
(b)
DISCUSSED:
-
Most of the s9(2)(a)
are successfully working remotely from home.
-
Treasury has agreed to put in place an automatic payment for the funding of the
DBP Annuitants Scheme pension payments every four weeks.
-
Management has advised Treasury there is likely to be a Section 72 claim this year
for the three large defined contribution schemes. The value of the claim is
estimated at $22 million, with the worst case scenario being $40 million.
-
Membership activity – there has been an increase in requests relating to
redundancy.
-
s9(2)(a)
form a large percentage of the membership of the DBP
Contributors Scheme and all the members of the s9(2)(a)
.
6.
FINANCE
6.1 Schemes (GAT) results to 31 January 2020
The Board:
(a)
NOTED the report incorporating the Scheme Financial Statements for the nine months to
31 January 2020.
(b)
NOTED the reporting is dependent on receiving information from the custodian, JP Morgan.
At the time the Board papers were sent out, the results for February 2020 were not yet
available.
(c)
REQUESTED Management report back to the Board on the reason for the difference in
results in the graph for the Meat Industry Scheme compared to the Pension National and
Lump Sum National Schemes, given the asset allocations are the same.
6.2 Board of Trustees and Board Reserves Financial Statements
RELEASED UNDER THE OFFICIAL INFORMATION ACT
The Board:
(a)
NOTED the financial statements of the Board of Trustees for the ten months to 31 January
2020.
(b)
NOTED the financial statements of the Board Reserves, for the ten months to 31 January
2020.
7.
PAPERS FOR NOTING
7.1 Minutes of the ALCO Committee Meeting
4
The Board
NOTED the minutes of the ALCO Committee meetings held on 19 February 2020.
8.
DELEGATED DECISIONS
8.1 Board of Trustees of the National Provident Fund - Common Seal The Board
NOTED the use of the Common Seal of the Board of Trustees of the National
Provident Fund for the period 12 February 2020 to 16 March 2020.
8.2 Documents signed on behalf of the Board
The Board
NOTED no documents had been signed on behalf of the Board during the period 12
February 2020 to 16 March 2020.
8.3 Management Decisions made under Delegated Authority
The Board
NOTED Management’s delegated decisions during the period 12 February 2020 to
16 March 2020.
9.
OTHER BUSINESS
The Board
AGREED the May meeting would be conducted via Zoom.
There being no other business, the meeting finished at 11.30 am.
NEXT MEETING: The next meeting of the Board is scheduled to commence at 8.30am on the
19 May 2020 via Zoom.
RELEASED UNDER THE OFFICIAL INFORMATION ACT
5
Minutes of a
BOARD OF TRUSTEES OF THE NATIONAL PROVIDENT FUND
meeting of
(the
Board)
Venue
Level 12, the Todd Building, 95 Customhouse Quay, Wellington or
Video Conference via Zoom
Date
Tuesday, 19 May 2020 commencing at 8.30 am
PRESENT Via Zoom
Mr E Schuck (Chair)
Mr D Mussett
Ms L Edwards (till 12.15 pm)
Ms S Park
In Person
Mr S Ward
Mr W Stechman
IN ATTENDANCE
Mr S Tyler
Ms P Drury
Mr P Bevin
s9(2)(a)
, Ms N Rumsey, s9(2)(a)
APOLOGIES
Nil
Th
e Board initially met in the absence of Management.
All
Board members confirmed there were no specific interests to declare.
Th
e Board meeting commenced at 8.50 am.
1A
AQR PRESENTATION
Th
e Board
RECEIVED an interactive presentation from s9(2)(a)
, from AQR on style
premia and the value premium.
The presentation started at 9.00 am and concluded at 10.40 am.
The presentation covered the historical evidence for style premia since the 1920s, the
background and explanations for value investing, whether systemic value investing is still
relevant today or if there has been a fundamental shift in the markets, performance attribution
and what the future holds for value investing.
1.
MINUTES OF THE BOARD MEETING
The Board:
RELEASED UNDER THE OFFICIAL INFORMATION ACT
(a)
NOTED and
AGREED the minutes of the Board meeting held on 24 March 2020,
SUBJECT TO an amendment to item 3.1(b) to add the words “due to the Covid-19
environment” after 24 March 2020
.
(b)
CONFIRMED the Board
REQUEST for data be provided with the Board papers showing
actual and relative exposure to the appropriate index for fossil fuels, carbon and social
media.
1
2.
ADMINISTRATION
2.1 Matters Arising
The Board:
(a)
NOTED the Matters Arising.
(b)
REQUESTED the item under section 3.5 of the March 2020 minutes, requesting
clarification of the assumptions with respect to dividends and imputation credits, be added
to the Matters Arising.
2.2 Long Term Work Calendar
The Board:
(a)
NOTED the Long Term Work Calendar.
(b)
REQUESTED the risk register and risk profile, scheduled to be presented to the May
meeting in the Long Term Work Calendar, be circulated to the Board.
(c)
NOTED the CEO’s confirmation the risk register and risk profile had been reviewed by
the Audit and Risk Review Committee in February 2020 and there was nothing
Management wished to bring to the attention of the Board at this time.
2.3 Interests Register
The Board:
(a)
NOTED the Interests Register.
(b)
CONFIRMED no changes were required.
3.
KEY PAPERS
3.1 Chief Executive’s Overview
The Board:
(a)
NOTED the report.
(b)
DISCUSSED the content of the Chair’s letter for 2020 and suggested the content could
be shorter and include, for example:
-
highlights for the year
-
the Board’s role and changes to the Board
RELEASED UNDER THE OFFICIAL INFORMATION ACT
-
Covid-19 – reassurance as to ongoing operations
-
responsible investment
-
information graphs, snapshots
-
separation of the commentary on the investment market performance
-
commentary from the CEO
(c)
REQUESTED the draft letter be circulated to the Board for review and comment.
(d)
REQUESTED the summary financial statements and full financial statements for one
NPF scheme be forwarded to the Chair.
2
3.2 Health, Safety and Wellness Update
(a)
DISCUSSED the report, including leave balances.
(b)
REQUESTED the dashboard be circulated to the Board.
3.3 Annuitas Capital Market Assumptions at 31 March 2020
The Board:
(a)
NOTED the report and
DISCUSSED:
-
the assumptions had been reviewed by, and are supported by, the Investment
Committee;
-
the assumptions are primarily used for the asset allocation reviews and by the
Actuary in completing the reviews of the schemes.
-
the inflation assumption has been revised down since the Investment Committee
meeting and is now 1.6% for the next three years (same as for the RBNZ projection)
and is then assumed to trend to 2% by year 5 and average 2% from years 5 to 10.
-
the volatility assumptions for Annuitas are close to those assumed by s9(2)(b)(ii)
-
the forward earnings yield for NZ equities.
-
when changes might be made to the Annuitas assumptions based on comparison
with peer assumptions, noting this would be a matter for discussion with the
Investment Committee.
(b)
NOTED the Annuitas Capital Market Assumptions as at 31 March 2020.
(c)
NOTED the Annuitas Capital Market Assumptions have been shared with the Actuary.
4. INVESTMENTS
4.1 Quarterly Investment Report
The Board:
(a)
NOTED the report.
(b)
DISCUSSED:
- Investment performance for the quarter to 31 March 2020 was possibly the worst on
record for NPF.
- Returns from active management were also negative.
- Both fixed income and global equities under performed.
- The markets have rebounded in April and May.
- DAA added value through being overweight equities versus bonds and NZD.
- There will be a section 72 claim on the Crown.
RELEASED UNDER THE OFFICIAL INFORMATION ACT
4.2 Investment Update
The Board
NOTED and
DISCUSSED the report, including:
- Responsible investment – a draft shared statement on climate-related risk is being
developed by the CFIs. All the CFIs agree with managing the risks associated with
climate change and with aligning with Government policy. The differences are around
implementation across CFIs.
- How NPF’s active managers reflect climate risk in their investment processes.
3
- Management will report back to the Board on how each manager takes into account
climate change and ESG in their investment processes; what direction the Board may
wish to take to support the Government in reducing global warming; and on disclosure
of climate-related risks, possibly with assistance of MSCI ESG Metrics.
- The work being undertaken by Management on the possibility of introducing
s9(2)(a)
, noting the Board would like the paper on
this topic to show a comparison s9(2)(a)
and to address
why s9(2)(a)
.
- The peer comparisons of investment performance and fees have been removed from the
health check and will be included in the individual asset class reviews instead.
- The transactions required close out the s9(2)(b)(ii)
as they do not
deal with
.
4.3 Small Cap Exposures (follow up)
The Board
NOTED the report.
4.4 Fixed Income Review
The Board:
(a)
NOTED and discussed the report.
(b)
NOTED the existing managers have under-performed during the crisis.
(c)
NOTED both PIMCO and Brandywine under-performed in the GFC but made back all the
underperformance plus more subsequently.
(d)
NOTED PGIM remains the bench core manager.
(e)
NOTED Colchester remains the bench manager for Brandywine.
(f)
NOTED Insight and several other managers will continue to be monitored.
4.5 Investment Committee Minutes
The Board
NOTED the draft minutes for the Investment Committee meeting held on 7 May
2020.
5.
SCHEMES
5.1 Schemes Update
The Board:
RELEASED UNDER THE OFFICIAL INFORMATION ACT
(a)
NOTED the report.
(b)
DISCUSSED:
- The increase in 90 debts over the last three months.
- s9(2)(a)
staff have continued to operate effectively from offsite throughout Covid-19
with reduced levels of sick leave.
4
6.
FINANCE
6.1 Schemes and Global Asset Trust Financial Statements
The Board
NOTED the report.
6.2 Board of Trustees and Board Reserves Financial Statements
The Board:
(a)
NOTED and
REVIEWED the draft financial statements for the year ended 31 March 2020
of the Board of Trustees of the National Provident Fund.
(b)
NOTED the completed financial statements for the Board of Trustees of the National
Provident Fund for the year ended 31 March 2020 will be submitted to the Audit and Risk
Review Committee for final review on the 8th of June and resubmitted for
APPROVAL and
ADOPTION at the Board meeting on 16 June 2020.
7.
PAPERS FOR NOTING
7.1 Minutes of the ALCO Committee Meeting
The Board:
(a)
NOTED the minutes of the ALCO Committee meetings held on 19 February 2020, 19
March 2020 and 21 April 2020 and queried the added value of these minutes being
included with the Board papers.
(b)
REQUESTED Management review whether reporting could focus more usefully on the
‘output’ of rebalancing, namely the extent to which actual exposures are consistent with
target weights (for each Scheme).
8.
DELEGATED DECISIONS
8.1 Board of Trustees of the National Provident Fund - Common Seal The Board
NOTED the use of the Common Seal of the Board of Trustees of the National
Provident Fund for the period 12 February 2020 to 13 May 2020.
8.2 Documents signed on behalf of the Board
The Board
NOTED no documents had been signed on behalf of the Board during the period 12
February 2020 to 13 May 2020.
8.3 Management Decisions made under Delegated Authority
The Board
NOTED Management’s delegated decisions during financial year to 31 March 20
RELEASED UNDER THE OFFICIAL INFORMATION ACT 20
and for the period 1 April 2020 to 13 May 2020.
9.
OTHER BUSINESS
The Board
AGREED Board members may elect whether to attend the June meeting via Zoom
or in person.
There being no other business, the meeting finished at 12.30 am.
NEXT MEETING: The next meeting of the Board is scheduled to commence at 8.30am on the
16 June 2020 via Zoom.
5
Minutes of a
BOARD OF TRUSTEES OF THE NATIONAL PROVIDENT FUND
meeting of
(the
Board)
Venue
By circulation
Date
Wednesday, 20 May 2020
PRESENT
Mr E Schuck (Chair)
Mr D Mussett
Mr W Stechman
Mr S Ward
Ms L Edwards
Ms S Park
APOLOGIES
Nil
1.
NPF DEFINED CONTRIBUTION AND PERSONAL SCHEMES
The Board:
(
a)
RECEIVED a paper summarising the Actuary’s recommendations with respect to the
Pension National, Lump Sum National and Meat Industry Schemes (the
Defined
Contribution Schemes) and the Pension Cash Accumulation and Lump Sum Cash
Accumulation Schemes (the
Personal Schemes) in relation to:
•
Earnings Rates for the Defined Contribution and Personal Schemes;
•
Transfer Value Earnings Rates for the Defined Contribution and Personal Schemes;
•
Reserve distribution, if any, for the Pension Cash Accumulation Scheme;
•
Section 72 claims for the employer subsidised Defined Contribution Schemes ;
•
Administration costs for transfer
for the Defined Contribution and Personal Schemes;
together with a copy of the Actuary’s letter, dated 19 May 2020, setting out her
recommendations.
(b)
RESOLVED, based on the advice of the Actuary, to:
Pension National Scheme
(i)
DECLARE, in accordance with clause 16.1 of the Pension National Scheme trust
deed, an Earnings Rate of
4.00% per annum be applied to each Contributor's
Total Credit as at 1 April 2019.
(ii)
DETERMINE, in accordance with clause 16.2 of the Pension National Scheme
trust deed, the basis for allocating earnings on contributions paid to the
Pension National Scheme during the period 1 April 2019 to 31 March 2020
RELEASED UNDER THE OFFICIAL INFORMATION ACT
shall be at the rate of
1.60%.
(iii)
DETERMINE, for the purposes of clauses 31B.3 and 31B.4 of the Pension
National Scheme trust deed, the Transfer Value Earnings Rate (to apply from the
effective date of transfer to the date of payment of the transfer value) for the
Pension National Scheme from 21 May 2020 until further notice shall be at the
rate of
4.00% per annum.
(iv)
NOTE there may be a section 72 claim for the Pension National Scheme for the
year ended 31 March 2020.
1
Lump Sum National Scheme
(i)
DECLARE, in accordance with clause 14.1 of the Lump Sum National Scheme
trust deed, that an Earnings Rate of
4.00% per annum be applied to each
Contributor’s Total Credit as at 1 April 2019.
(ii)
DECLARE, in accordance with clause 14.2 of the Lump National Scheme trust
deed, the basis for allocating earnings to contributions paid to the Lump Sum
National Scheme during the period 1 April 2019 to 31 March 2020 shall be at the
rate of
1.60%.
(iii)
DETERMINE, for the purposes of clauses 22B.3 and 22B.4 of the Lump Sum
National Scheme trust deed, the Transfer Value Earnings Rate (to apply from the
effective date of transfer to the date of payment of the transfer value) for the
Lump Sum National Scheme from 21 May 2020 until further notice shall be at
the rate of
4.00% per annum.
(iv)
NOTE there may be a section 72 claim for the Lump Sum National Scheme for
the year ended 31 March 2020.
Meat Industry Scheme
(i)
DECLARE, in accordance with clause 16.1 of the Meat Industry Scheme trust
deed, that an Earnings Rate of
4.00% per annum be applied to each
Contributor’s Total Credit as at 1 April 2019.
(ii)
DETERMINE, in accordance with clause 16.3 of the Meat Industry Scheme trust
deed, the basis for allocating earnings to contributions paid to the Meat Industry
Scheme during the period 1 April 2019 to 31 March 2020 shall be at the rate of
2.00%.
(iii)
DETERMINE, for the purposes of clauses 27B.3 and 27B.4 of the Meat Industry
Scheme trust deed, the Transfer Value Earnings Rate (to apply from the
effective date of transfer to the date of payment of the transfer value) for the
Meat Industry Scheme from 21 May 2020 until further notice shall be at the rate
of
4.00% per annum.
(iv)
NOTE there may be a section 72 claim for the Meat Industry Scheme for the
year ended 31 March 2020.
Lump Sum Cash Accumulation Scheme
(i)
DECLARE, in accordance with Clause 11.1 of the Scheme trust deed, an
Earnings Rate of
4.00% per annum to apply from 21 May 2020 until further
notice.
(iii)
DETERMINE, for the purposes of clauses 19B.3 and 19B.4 of the Lump Su
RELEASED UNDER THE OFFICIAL INFORMATION ACT m
Cash Accumulation Scheme trust deed, the Transfer Value Earnings Rate (to
apply from the effective date of transfer to the date of payment of the transfer
value) for the Lump Sum Cash Accumulation Scheme from 21 May 2020 until
further notice shall be at the rate of
4.00% per annum.
Pension Cash Accumulation Scheme
(i)
DECLARE, in accordance with Clause 11.1 of the Scheme trust deed, an
Earnings Rate of
4.00% per annum to apply from 21 May 2020 until further
notice.
2
(ii)
DETERMINE, for the purposes of clauses 23B.3 and 23B.4 of the Pension Cash
Accumulation Scheme trust deed, the Transfer Value Earnings Rate (to apply
from the effective date of transfer to the date of payment of the transfer value)
for the Pension Cash Accumulation Scheme from 21 May 2020 until further
notice shall be at the rate of
4.00% per annum.
(iii)
DETERMINE, based on the advice of the Actuary, that in terms of clause
13.4.1 of the Pension Cash Accumulation Scheme trust deed, there is no
further distribution to contributors from the Reserve Account for the year ended
31 March 2020.
2.
ALL DEFINED CONTRIBUTION AND PERSONAL SCHEMES
The Board, based on the advice of the Actuary
APPROVED individual transfer values for
all Defined Contribution and Personal Schemes being reduced by an amount equal to
the administration cost of transfer, in cases where the solvency margin is less than or
equal to 0%, or greater than or equal to 10%.
RELEASED UNDER THE OFFICIAL INFORMATION ACT
3
Minutes of a
BOARD OF TRUSTEES OF THE NATIONAL PROVIDENT FUND
meeting of
(the
Board)
Venue
Level 12, the Todd Building, 95 Customhouse Quay, Wellington, or
Video Conference via Zoom
Date
Tuesday, 16 June 2020 commencing at 8.30 am
PRESENT Via Zoom
Mr E Schuck (Chair)
Mr D Mussett
In Person
Mr S Ward
Mr W Stechman
Ms S Park
Ms L Edwards
IN ATTENDANCE
Mr S Tyler
Ms P Drury
Mr P Bevin
s9(2)(a)
, Ms N Rumsey, Mr P McCaffrey and s9(2)(a)
for
the investment items
Ms F Morgan and Mr Silvio Bruinsma (in person) and s9(2)(a)
s9(2)(a)
, Deloitte Limited (via Zoom) – for agenda items 3.4,
3.5, 3.6, 3.7, 3.8 and 3.9
APOLOGIES
Nil
Th
e Board initially met in the absence of Management.
All
Board members confirmed there were no specific interests to declare.
Th
e Board meeting commenced at 9.10 am.
1.
MINUTES OF THE BOARD MEETINGS
Th
e Board:
(a)
NOTED and
AGREED the minutes of the Board meeting held on 19 May 2020
.
(b)
NOTED and
AGREED the minutes of the Board meeting held on 20 May 2020
.
2.
ADMINISTRATION
RELEASED UNDER THE OFFICIAL INFORMATION ACT
2.1 Matters Arising
The Board:
(a)
NOTED the Matters Arising.
(b)
REQUESTED the full Risk Register, currently provided to the Audit and Risk Review
Committee, be included with the papers for the October 2020 Board meeting and be
circulated annually to the Board going forward.
1
2.2 Long Term Work Calendar
The Board:
(a)
NOTED and
DISCUSSED the Long Term Work Calendar.
(b)
DISCUSSED the timing for presentation of the financial statements to the Audit and Risk
Review Committee and the Board for review.
(c)
REQUESTED Management confirm proposed subject(s) for discussion with the Actuary
at the October 2020 meeting.
2.3 Interests Register
The Board:
(a)
NOTED the Interests Register.
(b)
CONFIRMED no changes were required.
3.
KEY PAPERS
3.1 Chief Executive’s Overview
The Board:
(a)
NOTED the report.
(b)
NOTED Management is undertaking a review of Covid-19 from an operational
perspective and will provide a paper to the Board covering, for example, what went
well, the potential areas for savings/efficiencies, lessoned learned.
(c)
REQUESTED Management modify the Board evaluation tool – self assessment
questions for NPF, including excluding the 12 months trend and adding a comment
section to the right, then circulate the form to the Board for completion and return to
Mr Hunt, the Risk and Compliance Officer, who will summarise the responses for the
Board.
(d)
REQUESTED Management create a strawman NPF strategy document, identifying in
particular what success looks like, for circulation and discussion with the Board.
(e)
REQUESTED commentary from Management on cyber security risk management
including where the Board is positioned compared to industry practice.
(f)
DISCUSSED the Chair letter to members and
REQUESTED Management circulate the
draft to Board members for review and comment.
3.2 Health, Safety and Wellness Update
RELEASED UNDER THE OFFICIAL INFORMATION ACT
The Board
NOTED and
DISCUSSED the report, including staff leave balances.
3.3 Draft Minutes of the Audit and Risk Review Committee
The Board
NOTED the draft minutes of the Audit and Risk Review Committee held on 8 June
2020.
2
3.4 Financial Statements Review Process
The Board
NOTED the report on the financial statements review process.
3.5 Report to the Audit and Risk Review Committee for the year ended 31 March
2020
The Board:
(a)
WELCOMED Mr Bruinsma and s9(2)(a)
of Deloitte Limited to the meeting for
discussion of agenda items 3.3 to 3.9 inclusive.
(b)
RECEIVED comment from and
DISCUSSED with Mr Bruinsma the report on the financial
statements audit for the year ended 31 March 2020, including:
- it has been a challenging year, particularly given Covid-19.
- received an update on the status of the audits, noting it is expected the audit will be
closed out over the next week.
- regulatory matters – the Office of the Auditor General requires all audit reports to
include emphasis of matter. Emphasis of matter is commentary on something of
fundamental importance to the financial statements that the auditor should bring to
the attention of the reader, eg reporting on going concern basis, contingent
transactions. This year the Auditor General has requested emphasis of matter
commentary covering Covid-19 as there could potentially be valuation uncertainty.
The proposed wording will be circulated to the Board by the Chief Financial Officer.
- subsequent events – this year, given there are no subsequent events to record, the
note will be renamed Covid-19.
- SIPSP – disclosure of adjustments to asset allocation ranges has been included in the
notes to the financial statements and going forward the changes to the SIPSP will be
published promptly on the NPF website.
3.6 Representations
The Board:
(a)
DISCUSSED Management’s responses to section 10-13 of the questionnaire.
(b)
REVIEWED and
COMPLETED section 14.
(c)
AUTHORISED the Chair and Chair of the Audit and Risk Review Committee to sign (via
electronic signature) the questionnaire on behalf of the Board.
(d)
NOTED the representations from Management.
(e)
REQUESTED:
- a change to page 2 of the representation letter from the Board to the Audit
RELEASED UNDER THE OFFICIAL INFORMATION ACTor to
remove the word “additional” and at the end of the paragraph headed Representations
remove the text about the provision of information.
- next year the representations letters be updated (eg removing the reference to
hereinafter and deleting the colon at the end of the first page and merging with the
text at the top of page 2) and consolidated into one letter that all members of the
Management team sign.
- Management review and report back on the use of expected investment returns by
the Actuary versus minimum risk rates and why.
(e)
AUTHORISED the Chair and Chair of the Audit and Risk Review Committee to sign (via
electronic signature) the representation letters to the Auditor.
3
3.7 Financial Statements – Board of Trustees of the National Provident Fund
The Board:
(a)
NOTED the draft financial statements for the Board of Trustees of the National Provident
Fund for the year ended 31 March 2020.
(b)
RESOLVED to:
(i)
APPROVE the financial statements for the Board of Trustees of the National
Provident Fund for the year ended 31 March 2020.
(ii)
AUTHORISE the Chair and the Chair of the Audit and Risk Review Committee
to sign (via electronic signature), on behalf of the Board, the financial statements
for the Board of Trustees of the National Provident Fund for the year ended 31
March 2020.
3.8 Financial Statements – Global Asset Trust
The Board:
(a)
NOTED the review undertaken by the Audit and Risk Review Committee of the financial
statements for the Global Asset Trust for the year ended 31 March 2020.
(b)
REQUESTED Note 6.5.2 – the note be amended to:
- remove the word “invested” where inserted.
- add a sentence explaining the variance between the asset/liability values as at March
2019 and March 2020 is due primarily to currency volatility.
(b)
RESOLVED to:
(i)
APPROVE the financial statements for the Global Asset Trust for the year ended
31 March 2020.
(ii)
AUTHORISE the Chair and the Chair of the Audit and Risk Review Committee
to sign (via electronic signature), on behalf of the Board, the financial statements
for the Global Asset Trust for the year ended 31 March 2020.
3.9 Financial Statements – Schemes
The Board:
(a)
NOTED the review undertaken by the Audit and Risk Review Committee of the financial
statements for the Pension National Scheme, the Aircrew Superannuation Scheme and
the National Provident Pension Scheme for the year ended 31 March 2020.
RELEASED UNDER THE OFFICIAL INFORMATION ACT
(b)
REQUESTED amendments to the notes to the financial statements as follows:
- Strategic asset allocation – investment:
-
Note to the financial statements for each scheme is updated confirming changes
to the SIPSP will be published promptly.
- Investment assets - reference to asset classes is changed from “New Zealand
equities and overseas equities” to “equities.”
- Financial risk management – final paragraph, scaling - note for each scheme is updated
to 1.1, rather than 1.10%.
- Aircrew Scheme – note 11.2 – word in amendment to first bullet under the table is
changed from “increase” to “decrease.”
4
(c)
NOTED Management will be reviewing the asset-based costing model later this year.
(b)
RESOLVED:
(i)
SUBJECT to the amendments requested above, to
APPROVE the financial
statements for the nine schemes, namely -
Pension National Scheme
Lump Sum National Scheme
Meat Industry Scheme
DBP Contributors Scheme
DBP Annuitants Scheme
Aircrew Superannuation Scheme
Pension Cash Accumulation Scheme
Lump Sum Cash Accumulation Scheme, and
National Provident Pension Scheme
for the year ended 31 March 2020.
(ii)
AUTHORISE the Chair and the Chair of the Audit and Risk Review Committee
to sign (via electronic signature), on behalf of the Board, the financial statements
for the above nine schemes for the year ended 31 March 2020
PROVIDED there
are no material changes. If the changes are material, then the financial
statements are to be recirculated to the full Board for approval.
(c)
NOTED the Auditor’s expectation the financial statements will be completed and available
for signing by 23 June 2020. The Auditor will send a confirmation email to the Chair and
the Chief Executive once the audit process has been completed.
3.10 Section 67 (1A) Report to the Minister of Finance
The Board:
(a)
REVIEWED the report.
(b)
REQUESTED the wording and table on under section A1 be updated to provide for three
columns, namely the benchmark, the benchmark with tilting and the actual asset
allocations, similar to the reporting provided in the notes to the financial statements for
the schemes.
(b)
APPROVED the report
SUBJECT TO the changes noted above.
3.11 National Provident Pension Scheme – Pension Increase
The Board:
(a)
NOTED and
DISCUSSED the report.
RELEASED UNDER THE OFFICIAL INFORMATION ACT
(b)
RESOLVED there be no pension increase for the National Provident Pension Scheme for
the year ended 31 March 2020.
3.12 s9(2)(i)
s9(2)(i)
s9(2)(i)
s9(2)(i)
s9(2)(i)
s9(2)(i)
s9(2)(i)
5
s9(2)(i)
s9(2)(i)
s9(2)(i)
3.13 Minimum Risk Rates 31 March 2020
The Board:
(a)
NOTED the Minimum Risk Rates (
MRRs) for the NPF Defined Benefit Schemes as at 31
March 2020.
(b)
NOTED the Annuitas MRRs will be used for the NPF Defined Benefit Schemes for Board
reporting, disclosure in the financial statements and the strategic asset allocation reviews
(including for determining whether the investment strategy is adding value compared to
the additional risk being taken).
(c)
NOTED the MRRs are notably lower than 31 March 2019 which, all else being equal, is
expected to raise the present value of the liabilities in the actuarial valuations.
3.14 Schemes: DBP Contributors Scheme, DBP Annuitants Scheme and Aircrew
Scheme
A.
Basis for determining the transfer of assets between the DBP Contributors
Scheme and the DBP Annuitants Scheme.
The Board:
(a)
NOTED the report on the basis for determining the transfer of assets between the DBP
Contributors Scheme and the DBP Annuitants Scheme.
(b)
REQUESTED Management confirm why the factors for males are higher than for
females.
(c)
Based on the recommendations of the Actuary,
RESOLVED to:
(i)
ADOPT the 202/2021 transfer basis, set out in the Actuary’s report dated 4 June
2020, and the transfer factors, calculated using the transfer basis as set out in
Appendix A of the report, with effect from 30 June 2020, for the purposes of
clause F9 of the trust deed of the DBP Contributors Scheme and clause 8 of the
trust deed of the DBP Annuitants Scheme;
(ii)
continue to
REVIEW the transfer basis on an annual basis.
B.
DBP Contributors Scheme – Actuarial Review
RELEASED UNDER THE OFFICIAL INFORMATION ACT
The Board:
(a)
NOTED the report on the actuarial review for the DBP Contributors Scheme, as at 31
March 2020.
(b)
RESOLVED to
ACCEPT the Actuary’s recommendations that:
(i)
Employer contributions to the DBP Contributors Scheme increase as
recommended in the actuarial review as at 31 March 2019, to 4 times
contributors’ contributions for the period 1 April 2021 to 31 March 2022 and
defer any decision of the rate to apply from 1 April 2022 until the results of the
statutory valuation as at 31 March 2021 are known.
6
(ii)
The Board does not amend the trust deed to s9(2)(i)
from
the DBP Contributors Scheme.
(b)
NOTED the Actuary’s recommendations that:
(i)
The next actuarial review of the DBP Contributors Scheme be carried out as at
31 March 2020 to review the employer contribution rate recommendation.
(ii)
The investment strategy of the Scheme is reviewed at least every five years, i.e.
before or during 2024 (a review is currently being undertaken).
(ii)
The Board continue to advise contributors who have reached age 65 of the
implications of remaining in the Scheme after age 65.
C.
Aircrew Superannuation Scheme – Actuarial Review
The Board:
(a)
NOTED the Actuary provided a letter confirming the actuarial position the Aircrew
Superannuation Scheme as at 31 March 2020.
(b)
DISCUSSED the removal of the allowance for future salary increases and
REQUESTED further explanation from Management.
(c)
NOTED the deferral of the actuarial review until 30 June 2020, when the movements
and elections of members will be better known.
3.15 Schemes – Section 72
The Board:
(a)
NOTED the report.
(b)
RESOLVED:
(i)
In terms of section 72 of the National Provident Fund Restructuring Act 1990,
TO MAKE A CLAIM on the Minister for those deficits (and increased deficit)
arising from the application of the 4% minimum earnings rate to the Schemes
listed below in the year ended 31 March 2020.
Pension National Scheme
$ 17,403
Lump Sum National Scheme
$ 4,680
Meat Industry Scheme
$ 5,017
Total
$ 27,100
RELEASED UNDER THE OFFICIAL INFORMATION ACT
(ii)
To
APPROVE the form of the letter to the Minister of Finance.
(iii)
To
AUTHORISE Management to progress the claim with the Minister and
Treasury.
3.16 Board Meeting Dates 2021
The Board:
(a)
NOTED the paper.
7
(b)
APPROVED the following meeting dates for 2021 for the Board and the Audit and Risk
Review Committee:
Board meeting dates
Month
Date
Jan
No meeting
Feb
Thurs 25th
March
Tue 30th
April
No meeting
May
Tue 18th
June
Fri 25th
July
No meeting
Aug
Tue 24th
Sept
No meeting
Oct
TBC
Nov
No meeting
Dec
Tbc
Audit & Risk Review Committee meeting dates:
Month
Date
March
Thurs 11th
June
Fri 18th
Aug
Tue 24th
Oct
Tbc
(c)
NOTED the Investment Committee will have a teleconference 2 weeks prior to the
Board meeting if there are papers of significance for review.
4. INVESTMENTS
4.1 Investment Update
The Board
NOTED and
DISCUSSED the report, including:
- The total fund return is ahead of benchmark for s9(2)(i)
gross with the DAA
position a positive contributor to performance.
- Management is collating data from a survey of managers on climate change and
expects to be able to provide an update to the next Board meeting.
4.2 Individual Style Premia Returns
The Board
NOTED the report.
RELEASED UNDER THE OFFICIAL INFORMATION ACT
4.3 Statement of Investment Policies, Standards and Procedures (SIPSP) Review
The Board:
(a)
NOTED and discussed the report.
(b)
APPROVED the SIPSP as presented for publication promptly on the website.
8
4.4
Private Equity
The Board:
(a)
NOTED the report.
(b)
AGREED s9(2)(i)
4.5
Investments Road Map
The Board:
(a)
NOTED the investment road map as presented.
(b)
AGREED with the reallocation of the papers on Alternatives and Responsible
Investment, scheduled for Q3, to Q4.
(c)
NOTED the review of the notional portfolio for the DBP Annuitants Scheme will be
commenced in Q4.
(d)
REQUESTED the Matters Arising be updated to show item 5/12/19 4.3 Investment
Team Road Map, Responsible Investment as completed as this is now a standing item
on the Board agenda.
4.6
Investment Committee Minutes
The Board
NOTED the draft minutes for the Investment Committee meeting held on 5 June
2020.
5.
SCHEMES
5.1 Schemes Update
The Board
NOTED the report.
5.2
Pensioner Mortality Investigation 2017-2020
The Board:
(a)
NOTED the report.
(b)
REQUESTED a copy of the full report be circulated to s 9(2)(a)
.
6.
FINANCE
RELEASED UNDER THE OFFICIAL INFORMATION ACT
6.1 Schemes and Global Asset Trust Financial Statements to 31 May 2020
The Board
NOTED the draft results per asset class to 31 May 2020.
6.2 Board of Trustees of the National Provident Fund and Board Reserves - Financial
Statements to 30 April 2020
The Board
NOTED and
REVIEWED the draft financial statements for the month ending 30 April
2020 for the Board of Trustees of the National Provident Fund.
7.
PAPERS FOR NOTING
7.1 Minutes of the ALCO Committee Meeting
9
The Board:
(a)
NOTED the minutes of the ALCO Committee meetings held on 20 May 2020.
(b)
NOTED the request for inclusion in the Board papers of the report on the benchmark and
actual asset allocations is with Management for action.
8.
DELEGATED DECISIONS
8.1 Board of Trustees of the National Provident Fund - Common Seal The Board
NOTED there had been no use of the Common Seal of the Board of Trustees of the
National Provident Fund for the period 14 May 2020 to 10 June 2020.
8.2 Documents signed on behalf of the Board
The Board
NOTED no documents had been signed on behalf of the Board during the period 14
May 2020 to 10 June 2020.
8.3 Management Decisions made under Delegated Authority
The Board
NOTED Management’s delegated decisions during financial year to 14 May 2020 to
10 June 2020.
9.
OTHER BUSINESS
There being no other business, the meeting finished at 12.55 pm.
NEXT MEETING: The next meeting of the Board is scheduled to commence at 8.30am on the
25 August 2020.
RELEASED UNDER THE OFFICIAL INFORMATION ACT
10
Minutes of a
BOARD OF TRUSTEES OF THE NATIONAL PROVIDENT FUND
meeting of
(the
Board)
Venue
Level 12, the Todd Building, 95 Customhouse Quay, Wellington, telephone
or video conference via Zoom
Date
Tuesday, 25 August 2020 commencing at 9.00 am
PRESENT Via Zoom
Mr E Schuck (Chair)
Mr D Mussett
Ms L Edwards
Via Phone
Mr S Ward
In Person
Mr W Stechman
Ms S Park
IN ATTENDANCE
Mr S Tyler
Mr P Bevin (Via Phone)
s 9(2)(a)
, Mr P McCaffrey and s 9(2)(a)
for the investment
items
s 9(2)(a)
APOLOGIES
Nil
Th
e Board initially met in the absence of Management.
All
Board members confirmed there were no specific interests to declare.
Th
e Board meeting commenced at 9.30 am.
1.
MINUTES OF THE BOARD MEETINGS
Th
e Board
NOTED and
AGREED the minutes of the Board meeting held on 16 June 2020
.
2.
ADMINISTRATION
2.1 Matters Arising
The Board:
a)
NOTED the Matters Arising.
b)
REQUESTED Management report back to the Board at the October meeting on the review
of Covid-19 from an operational perspective as discussed at the meeting on 16 June 20
RELEASED UNDER THE OFFICIAL INFORMATION ACT 20.
2.2 Long Term Work Calendar
The Board
NOTED the Long-Term Work Calendar.
2.3 Interests Register
The Board:
a)
NOTED the Interests Register.
b)
CONFIRMED an update for Mr Ward was required as previously advised to Management.
1
3.
KEY PAPERS
3.1 Chief Executive’s Overview
The Board:
a)
NOTED the report.
b)
NOTED s 9(2)(a)
would be giving a verbal update on his review of GSFA’s investment
operations to the GSFA on 7 October 2020 before presenting his final report on 20
November 2020 and
AGREED the Chair will contact the Chair of GSFA around logistics
for the Board to attend the verbal update by s 9(2)(a)
.
c)
REQUESTED Management circulate the last review by s 9(2)(a)
and the GSFA’s
response to the Board.
3.2 Health, Safety and Wellness Update
The Board
NOTED the Health and Safety Update and the dashboard.
3.3 SAA Review: Lump Sum Cash Accumulation Scheme
a)
NOTED there is no proposed change to the allocation to equities as the current
growth/income mix is expected to meet the Scheme’s return objective.
b)
APPROVED the allocation to fixed interest in its entirety to F Fund.
c)
APPROVED the next review of the asset allocation of the Lump Sum Cash
Accumulation Scheme be undertaken in one year’s time, as at 30 June 2021.
3.4 F2 Fund and Aircrew Scheme
The Board:
a)
NOTED that, if the Board approves the LSCAS recommendations, the size of the F2
Fund will be limited to $16 million, s 9(2)(i)
.
b)
APPROVED the new allocation for the Aircrew Scheme being 57% in F Fund instead of
28.5% in the F Fund and 28.5% in F2 Fund.
c)
NOTED there are no changes to the Aircrew Scheme’s allocation for the other funds it
invests in, namely E, O or A Funds.
d)
NOTED the expected volatility of the Aircrew Scheme will remain at 5.0% and
the expected return increases by 0.1% to 2.8% per annum.
RELEASED UNDER THE OFFICIAL INFORMATION ACT
e)
NOTED there will be no assets in the F2 Fund so that Fund can be closed.
f)
APPROVED the termination of s 9(2)(b)(ii)
2
s 9(2)(a)
3.5 Catastrophe Risk Exposure
The Board:
a)
DISCUSSED the report and
NOTED:
o
The report did not s 9(2)(i)
o
In NPF the assets would likely be subject to FDR and would not be able to
offset losses.
o
If FDR applies, s 9(2)(i)
b)
AGREED to Management investigating the asset class further, in particular confirming
the tax treatment and its flow through, and updating the report for further discussion
by the Board, including the reasons why the Board has previously decided not to invest
in the asset class and what has changed.
3.6 2020 Responsible Investment (RI) Policy Review
The Board:
a)
NOTED and
DISCUSSED the report, including:
o
How the fiduciary obligation to members sits with regard to RI and the
incorporation of Environmental, Social and Governance (
ESG) factors into
investment decision-making.
o
NPF has no formal mandate with regard to RI and ESG.
o
Current practice with regard to screening and monitoring and the different
approaches taken by other CFIs.
o
Communication of the Board’s position and its preparedness in answering any
questions on its position and why.
o
The importance of understanding what our current portfolio investment is in
carbon.
b)
NOTED this review of developments in policy and practice with regard to RI and
ESG factors, in particular the conclusions in the report.
c)
NOTED the Government’s directive that default Kiwisaver providers will have to
exclude fossil fuels from next year.
d)
NOTED Management will review NPF’s RI policy statement based on the Board
discussion and present any revised wording to the next Board meeting.
e)
REQUESTED Management to obtain a carbon analysis of NPF’s portfolio from MSCI ESG
s 9(2)(i)
and to explore an alternative lower carbon mandate with
s 9(2)(i) .
RELEASED UNDER THE OFFICIAL INFORMATION ACT
f)
REQUESTED Management to prepare a statement on how NPF is addressing its
fiduciary duty to members in relation to RI and ESG and its obligation to the Crown as
guarantor.
3.7 Board Self Evaluation
The Board
NOTED the report.
3
3.8 Draft Strategic Plan
The Board
NOTED the draft plan was with s 9(2)(a)
who will forward to the Chair prior to
wider circulation.
3.9 Legislative Compliance
The Board:
a)
NOTED the report
b)
REQUESTED Management provide more information as to why the s 9(2)(i)
4. INVESTMENTS
4.1 Quarterly Investment Report
The Board
NOTED the report.
4.2 Investment Update
The Board
NOTED the Investment update.
4.3 Investment Road Map
The Board
NOTED the report.
4.4
SIPSP Compliance
The Board:
a)
NOTED s 9(2)(i)
did not find any instances of non-compliance with the
SIPSP.
b)
APPROVED the following changes to the SIPSP:
i. Clause 6.1, removal of the bullet points:
•
s 9(2)(ba)(i)
; and
•
a statement of any voting right issues.
ii. Clause 7.4, addition of the word “may”
RELEASED UNDER THE OFFICIAL INFORMATION ACT
•
Market risk is further managed by requiring investment managers to
manage their portfolios within defined exposure limits. Those limits may
include (as appropriate).
c)
REQUESTED Management provide further information on what restrictions apply to
fixed interest mandates that limit investment in non-benchmark entities, as is suggested
in s 9(2)(i)
.
4
4.5
Global Custody Review
The Board:
a)
NOTED s 9(2)(i)
has been appointed to undertake a custody
review covering fees, services and contract.
b)
NOTED Management is satisfied with the services from s 9(2)(i)
, and s 9(2)(i)
so soon after the last one.
c)
NOTED s 9(2)(i)
d)
NOTED s 9(2)(i)
e)
NOTED s 9(2)(a)
is willing to present his review to the Board by Zoom if
requested.
f)
NOTED Management will seek Board approval for any changes to the custody
fees or contract, in Q4.
4.6
Global Equities Review
The Board:
a)
NOTED the global equities portfolio has met its excess return and risk-adjusted
return expectations over all measurement periods.
b)
NOTED:
•
s 9(2)(j)
• s 9(2)(j)
• s 9(2)(j)
c)
NOTED s 9(2)(j)
and s 9(2)(j) .
d)
NOTED the global equities portfolio has performed creditably compared to other
multi-manager portfolios.
e)
REQUESTED Management to provide comparisons with other multi-manager global
equities portfolios to enable robust benchmarks.
RELEASED UNDER THE OFFICIAL INFORMATION ACT
f)
REQUESTED Management provide further information as to the difference in the
calculation of “added value” and “alpha”, and the chart used to calculate the figures for
s 9(2)(i) as an example.
4.7 NZ Cash and Fixed Interest Review
The Board:
a)
NOTED s 9(2)(i)
5
b)
NOTED s 9(2)(i)
4.8 Investment Committee Draft Minutes 11 August 2020
The Board
NOTED the report.
5.
SCHEMES
5.1 Schemes Update
The Board:
a)
NOTED the report.
b)
REQUESTED Management prepare an agenda for the Actuary.
6.
FINANCE
6.1 Schemes and Global Asset Trust Financial Statements to 31 July 2020
The Board
NOTED the report incorporating the Schemes’ financial statements for the four
months to 31 July 2020.
6.2 Board and Board Reserves Financial Statements to 31 July 2020
The Board:
a)
NOTED the financial statements of the Board of Trustees for the four months ending 31
July 2020.
b)
NOTED the financial statements of the Board Reserves, for the four months ending 31
July 2020.
7.
PAPERS FOR NOTING
7.1 Minutes of the ALCO Committee Meeting
The Board:
a)
NOTED the minutes of the ALCO Committee meetings held on 22 June 2020.
b)
NOTED the minutes of the ALCO Committee meetings held on 21 July 2020.
RELEASED UNDER THE OFFICIAL INFORMATION ACT
c)
NOTED the minutes of the ALCO Committee meetings held on 18 August 2020.
8.
DELEGATED DECISIONS
8.1 Board of Trustees of the National Provident Fund - Common Seal The Board
NOTED there had been no use of the Common Seal of the Board of Trustees of the
National Provident Fund for the period 11 June 2020 to 19 August 2020.
8.2 Documents signed on behalf of the Board
6
The Board
NOTED the documents signed on behalf of the Board for the period 11 June 2020 to
19 August 2020.
8.3 Management Decisions made under Delegated Authority
The Board
NOTED Management’s delegated decisions during financial year to 11 June 2020 to
19 August 2020.
9.
OTHER BUSINESS
There being no other business, the meeting finished at 1.00 pm.
NEXT MEETING: The next meeting of the Board is scheduled to commence at 8.30am on the
20 October 2020.
RELEASED UNDER THE OFFICIAL INFORMATION ACT
7
Minutes of a
BOARD OF TRUSTEES OF THE NATIONAL PROVIDENT FUND
meeting of
(the
Board)
Venue
Level 12, the Todd Building, 95 Customhouse Quay, Wellington, telephone
or video conference via Zoom
Date
Tuesday, 20 October 2020 commencing at 9.00 am
PRESENT Via Zoom
Edward Schuck (Chair)
Daniel Mussett
In Person
Stephen Ward
Wayne Stechman
Sarah Park
Louise Edwards
IN ATTENDANCE
Simon Tyler
Paul Bevin
Keith Poore, Nicky Rumsey and s 9(2)(a)
for the
investment items
s 9(2)(a)
for the Schemes items
s 9(2)(a)
s 9(2)(a)
, PWC, via Zoom, for agenda item 3.3 (9.55 am
to 10.45 am)
s 9(2)(h)
APOLOGIES
Nil
Th
e Board initially met in the absence of Management.
All
Board members confirmed there were no specific interests to declare.
Th
e Board meeting commenced at 9.50 am.
1.
MINUTES OF THE BOARD MEETINGS
Th
e Board
NOTED and
AGREED the minutes of the Board meeting held on 25 August 2020
.
2.
ADMINISTRATION
2.1 Matters Arising
The Board
NOTED the Matters Arising.
RELEASED UNDER THE OFFICIAL INFORMATION ACT
2.2 Long Term Work Calendar
The Board:
a)
NOTED the Long-Term Work Calendar.
b)
NOTED Datacom has been invited to attend the 25 February 2021 meeting.
c)
NOTED a paper on the review of Covid-19 from an operational perspective will be
provided to the December 2020 meeting, after it has been considered by the Annuitas
Management Limited Board.
1
2.3 Interests Register
The Board:
a)
NOTED the Interests Register.
b)
NOTED Louise Edwards appointment to the boards of:
▪
MFL Mutual Fund Limited, and
▪
Superannuation Investments Limited.
3.
KEY PAPERS
3.1 Chief Executive’s Overview
The Board:
a)
NOTED the report.
b)
AGREED a Board meeting will be held on 8 December 2020, commencing at 8.30 am.
c)
REQUESTED Management give consideration to:
o
a programme of presentations by investment managers to the Board and that this
matter be added to the Long Term Work Calendar; and
o
suggestions for future Board education and development opportunities.
3.2 Health, Safety and Wellness Update
The Board
NOTED the Health and Safety Update and the dashboard.
3.3 Actuary
The Board:
a)
WELCOMED the Actuary, s 9(2)(a)
from PWC, to the meeting.
b)
RECEIVED a presentation from the Actuary including:
o
Commentary on tasks undertaken by the Actuary under the agreement with the
Board and the frequency of the tasks
o
Aircrew Scheme:
o
current membership
o
benefit election options
o
the current assets and employer contributions
RELEASED UNDER THE OFFICIAL INFORMATION ACT
o
the preliminary results of the actuarial review
o
investment returns
o
contributor salaries and retirement options
o
the Actuary’s recommendations
c)
AGREED with the Actuary’s conclusions with respect to the Aircrew Scheme, namely:
o
that the employer contribution rate for the Aircrew Scheme is retained at 3.9 x
contributors’ contributions until the next review.
2
o
The TA/TB for the Aircrew Scheme is monitored monthly over the coming period as
an indicator of the funding level for the scheme.
o
The wording of any recommendation to the Minister of Finance includes provision
for a contribution holiday should the Aircrew Scheme become over funded due to
volatility in returns in the short term.
d)
NOTED the Actuary will finalise her report on the Aircrew Scheme in early February
2021, prior to a recommendation being submitted to the Minister of Finance for
implementation in April 2021.
e)
THANKED s 9(2)(a)
for her attendance at the meeting.
3.4 Schemes – Expense Projections
The Board:
a)
NOTED the report.
b)
DISCUSSED:
o
the model and the results
o
membership projections and triggers for wind up
c)
QUERIED the increase in the value of the assets and the trend in membership numbers
and
REQUESTED Management review the underlying assumptions and report back to
the Board at a future meeting.
3.5 Cyber Security Risk Review
The Board:
a)
NOTED the report.
b)
APPROVED the engagement of s 9(2)(i)
to:
o
map out the risk landscape over the next five years in the context of NPF’s
overall appetite for change; and
o
consider a digital transformation journey to remediate the compounded risk of
both ageing technology and skill rarity for the PIMS system.
3.6 SAA Review – DBP Contributors Scheme
The Board:
RELEASED UNDER THE OFFICIAL INFORMATION ACT
a)
NOTED and
DISCUSSED the report.
b)
NOTED the current allocation is expected to meet the Scheme’s investment objective.
c)
CONFIRMED there is no change to the current SAA for the DBP Contributors Scheme.
d)
NOTED the 3 yearly comprehensive SAA review is scheduled for 2021.
3
s 9(2)(h)
s 9(2)(h)
s 9(2)(h)
s 9(2)(h)
s 9(2)(h)
s 9(2)(h)
s 9(2)(h)
s 9(2)(h)
s 9(2)(h)
s 9(2)(h)
s 9(2)(h)
s 9(2)(h)
s 9(2)(h)
s 9(2)(h)
s 9(2)(h)
3.8 Appointment to the Annuitas Management Limited Board
RELEASED UNDER THE OFFICIAL INFORMATION ACT
The Board
NOTED the appointment of Alison O’Connell as a director of Annuitas Management
Limited, representing the Government Superannuation Fund Authority.
3.9 Annuitas Management Limited – Annual Report - Resolutions
The Board:
a)
CONFIRMED Edward Schuck and Stephen Ward as the Board’s representatives at the
Annual General Meeting of Annuitas Management Limited to be held in November 2020.
4
b)
APPROVED an Annuitas Management Limited shareholder’s resolution on behalf of the
Board under section 122 of the Companies Act that:
In respect of the Company’s annual report for the year ended 30 June 2020 and
pursuant to section 211(3) of the Companies Act 1993 (the
Act), the Company
need not comply with section 211(1)(g) of the Act requiring details of the number
of employees and their remuneration, the value of which exceeds $100,000, to
be included in the annual report.
RELEASED UNDER THE OFFICIAL INFORMATION ACT
5
3.10 New Zealand Public Equities Portfolio
The Board:
a)
NOTED the report, in particular the graph showing the Median NZ Manager Rolling 5 year
excess return, and
AGREED the apparent secular decline in manager excess returns
merited further consideration.
b)
DISCUSSED:
o
consultants views on active versus passive investment;
o
the ability of investment managers to add value;
o
the capacity constraints affecting most surveyed managers;
o
whether the market has materially changed;
o
information on benchmarking ( s 9(2)(b)(ii)
comments);
o
whether focussed research can identify managers that can outperform, given all we
know about managers, fees and potential market changes.
c)
REQUESTED Management include in the Long Term Work Calendar for Investments a
prospective looking paper considering the most efficient way to access and invest in the
New Zealand equity market (taking into account NPF’s particular position, eg tax
considerations).
3.11 Key Risk Profile and Key Risk Register
The Board:
a)
NOTED the report and that terminology in the report has been and will continue to be
reviewed for consistency with the Investments roadmap.
b)
APPROVED the current risk key risk profile and key risk register.
4. INVESTMENTS
4.1 Investment Update
The Board
NOTED:
o
the Investment update;
o
the exceptional market performance since 31 March;
o
the Quarterly Investment Report will be circulated as soon as it is available and will
also be included with the papers for noting at the December 2020 meeting;
o
Management is discussing with s 9(2)(b)(ii) decarbonisation of their portfolio.
o
performance, including against peers, noting Management’s advice s 9(2)(i)
performance had been similar to that of
s 9(2)(i), the s 9(2)(i)
;
RELEASED UNDER THE OFFICIAL INFORMATION ACT
o
the appropriateness of the size of the bet relative to fund size and tolerance for risk;
o
a paper will be presented to the next Investment Committee meeting on
.
s 9(2)(i)
4.2 Investment Road Map
The Board
NOTED the report.
4.3
Global Equities Review: Follow Up
The Board:
6
a)
NOTED the performance comparisons with other multi-manager s 9(2)(j)
portfolios.
b)
NOTED the possible reasons for differences between excess returns and alpha.
4.4
Carbon Footprint
The Board
NOTED the report and
REQUESTED the paper be resubmitted to the December
Board meeting for discussion.
4.5
SIPSP Compliance – PIMCO
The Board
NOTED PIMCO’s guideline restrictions.
4.6 Investment Committee Draft Minutes 6 October 2020
The Board
NOTED the report.
5.
SCHEMES
5.1 Schemes Update
The Board
NOTED the report.
6.
FINANCE
6.1 Schemes and Global Asset Trust - Financial Statements to 31 August 2020
The Board
NOTED the report incorporating the Schemes’ financial statements for the five
months to 31 August 2020.
6.2 Board and Board Reserves Financial Statements to 31 August 2020
The Board:
a)
NOTED the financial statements of the Board of Trustees for the five months ending 31
August 2020.
b)
NOTED the financial statements of the Board Reserves, for the five months ending 31
August 2020.
7.
PAPERS FOR NOTING
7.1 Minutes of the ALCO Committee Meeting
The Board
NOTED the minutes of the ALCO Committee meetings held on 22 September 2020.
RELEASED UNDER THE OFFICIAL INFORMATION ACT
8.
DELEGATED DECISIONS
8.1 Board of Trustees of the National Provident Fund - Common Seal The Board
NOTED there had been no use of the Common Seal of the Board of Trustees of the
National Provident Fund for the period 20 August 2020 to 12 October 2020.
7
8.2 Documents signed on behalf of the Board
The Board
NOTED the documents signed on behalf of the Board for the period 20 August 2020
to 12 October 2020.
8.3
Management Decisions made under Delegated Authority
The Board
NOTED Management’s delegated decisions during financial year to 20 August 2020
to 12 October 2020.
9.
OTHER BUSINESS
There being no other business, the meeting finished at 12.59 pm.
NEXT MEETING: The next meeting of the Board is scheduled to commence at
8.30am on
Tuesday, 8 December 2020.
RELEASED UNDER THE OFFICIAL INFORMATION ACT
8
Minutes of a
BOARD OF TRUSTEES OF THE NATIONAL PROVIDENT FUND
meeting of
(the Board)
Venue
Level 12, the Todd Building, 95 Customhouse Quay, Wellington, telephone
or video conference via Zoom
Date
Tuesday, 8 December 2020 commencing at 8.30 am
PRESENT Via Zoom
Edward Schuck (Chair) – 8.30 am until 11.01 am
Daniel Mussett
Sarah Park
Louise Edwards
In Person
Stephen Ward – Acting Chair from 11.01 am to 11.07 am
Wayne Stechman
IN ATTENDANCE
Simon Tyler
Paul Bevin
Nicky Rumsey and s 9(2)(a)
for the investment items
s 9(2)(a)
for the Schemes items
s 9(2)(a)
s 9(2)(a)
for item 3.5
APOLOGIES
Nil
Th
e Board meeting commenced at 8.30 am.
Th
e Board initially met in the absence of Management.
All
Board members confirmed there were no specific interests to declare.
1.
MINUTES OF THE BOARD MEETINGS
Th e Board
NOTED and
AGREED the minutes of the Board meeting held on 20 October 2020
.
2.
ADMINISTRATION
2.1 Matters Arising
The Board:
a)
NOTED the Matters Arising.
RELEASED UNDER THE OFFICIAL INFORMATION ACT
b)
NOTED s 9(2)(i)
2.2 Long Term Work Calendar
The Board
NOTED the Long-Term Work Calendar.
1
s 9(2)(a)
2.3 Interests Register
The Board:
a)
NOTED the Interests Register.
b)
NOTED:
• s 9(2)(a)
ceased as a non-executive director of s 9(2)(a)
• Daniel Mussett has been appointed as an Independent Member of the Heretaunga
Tamatea Settlement Trust effective December 2020.
• Louise Edwards’ elevation to the position of Chair for NZCU Baywide effective 28 October
2020.
•
s 9(2)(a)
•
s 9(2)(a)
will cease as a director s 9(2)(a)
.
• Sarah Park is a director and shareholder of Rapid Response Nursing Limited effective 23
September 2020.
3.
KEY PAPERS
3.1 Chief Executive’s Overview
The Board:
a)
NOTED the report.
b)
NOTED the recent tender for tax advisory services for the GSFA had been completed
and cost savings achieved.
c)
DISCUSSED the proposed meeting dates for 2021, noting the Chair will discuss the
proposed meeting dates further with Board members and provide feedback to the Chief
Executive and that the proposed meeting on 25 June 2021 will need to be rescheduled
due to unavailability of some Board members.
d)
AGREED to a joint dinner with the GSFA Board and
REQUESTED the Chief Executive
co-ordinate adjacent Board meetings to facilitate this.
e)
NOTED the paper on Initiatives, in particular the Board’s preference for more
communications with members being by way of email rather than post and that a key
activity for Management is the ongoing review and updating of process documentat
RELEASED UNDER THE OFFICIAL INFORMATION ACT ion.
f)
REQUESTED the Monthly Status Report on Initiatives be provided to the Board on a
quarterly basis.
3.2 Health, Safety and Wellness Update
The Board
NOTED the Health and Safety Update and the dashboard.
2
s 9(2)(a)
3.3 SAA Review: Aircrew Scheme
The Board:
a)
NOTED the paper and the paper under agenda item 3.6.
b)
NOTED the current allocation is expected to meet the Scheme’s investment objective.
c)
NOTED the 3 yearly comprehensive SAA review is scheduled for 2021.
d)
APPROVED the reallocation of 1% of the assets from the A Unit to the F Unit and the O
Unit respectively at 0.5% each (as per agenda item 3.6 for this meeting), with the new
asset allocation from 1 December 2020 being as follows:
Unit
Old Asset Allocation
New Asset Allocation
F Unit
57.0%
57.5%
E Unit
7.5%
7.5%
O Unit
29.5%
30.0%
A Unit
6.0%
5.0%
e)
REQUESTED Management develop a plan to identify trigger points for moving the
investment strategy for the Scheme to fixed interest and cash (on a MRR basis).
3.4 SAA Review – DBP Annuitants Scheme
The SAA Review for the DBP Annuitants Scheme was deferred for consideration at the February
2021 Board meeting.
3.5 Custodian Review
s 9(2)(i)
joined the meeting via Zoom.
The Board:
a)
WELCOMED s 9(2)(a)
to the meeting.
b)
RECEIVED a presentation from s 9(2)(a)
on the review of the Board’s custody
arrangements.
c)
NOTED s 9(2)(i)
d)
APPROVED the renewal of the custodian contract with s 9(2)(i)
.
RELEASED UNDER THE OFFICIAL INFORMATION ACT
e)
APPROVED the revised fee structure with s 9(2)(i)
.
f)
AUTHORISED the signing of the following new documentation with s 9(2)(i)
under
common seal by two authorised signatories:
i. an addendum to the Global Custody Agreement.
ii. an addendum to the Accounting and Related Services Agreement.
iii. a new fee agreement.
g)
NOTED either party may instigate a review of the fees after 3 years.
3
h)
NOTED Management wishes to have the same date on the documentation for both GSF
and NPF and for the new fee schedule to commence with effect from 1 January 2021.
i)
NOTED there will be a s 9(2)(i)
, in the absolute level of fees,
if the Fund’s structure and fund size remains the same.
s 9(2)(i)
s 9(2)(i)
s 9(2)(i)
s 9(2)(i)
s 9(2)(i)
s 9(2)(i)
e)
APPROVED the following changes to the SAAs for the Schemes:
Scheme
PNS, LSNS, M I, LSCAS
NPPS, Aircrew
Unit
Current Proposed Current Proposed
Allocation
SAA
SAA
SAA
SAA
F Unit
46.5%
47.5%
57.0%
57.5%
E Unit
9.5%
9.5%
7.5%
7.5%
O Unit
37.0%
38.0%
29.5%
30.0%
A Unit
7.0%
5.0%
6.0%
5.0%
f)
APPROVED the necessary changes to the SIPSP to reflect the new allocations for the
Schemes.
g)
NOTED a formal review of
s 9(2)(i) is scheduled for Q3 2021.
3.7
Responsible Investment (RI) Policy: Climate-Related Risks and Opportunities
(CRO)
The Board:
a)
ENDORSED a general approach to ESG matters that treats financially material ESG issues
as a normal part of portfolio management aimed at maximising members’ financial
interests while non-financial goals operate as constraints on that primary goal.
RELEASED UNDER THE OFFICIAL INFORMATION ACT
b)
DISCUSSED the draft policy statement on management of climate-related risks and
opportunities and
REQUESTED some amendments to the wording.
c)
NOTED the draft policy statement includes an obligation to report climate-related matters
in accordance with the TCFD template.
d)
AGREED to the publication of the policy statement on the website.
4
3.8 Carbon Footprint
The Board:
a)
NOTED and
DISCUSSED the paper, including:
o
the Board is supportive of the work undertaken by Management to date;
o
the competing interests of the members, the employers and the Crown;
o
further discussion is required to clarify and confirm the Board’s overall objective.
b)
AGREED the paper will be discussed again at the February 2021 Board meeting.
3.9
JP Morgan Tri-Party Agreement for Signing under Common Seal
The Board:
a)
NOTED the report.
b)
APPROVED the execution of the JP Morgan Tri-Party Agreement under common
seal by two authorised signatories.
4. INVESTMENTS
4.1 Quarterly Investment Report
The Board
NOTED the report.
4.2 Investment Update
The Board
NOTED the report and
DISCUSSED:
o
the equity market is up 33% since 1 April 2020;
o
total Fund performance is up 18% FYTD;
o
current DAA positions.
4.3 Investment Road Map
The Board
NOTED the report.
5.
SCHEMES
s 9(2)(i)
RELEASED UNDER THE OFFICIAL INFORMATION ACT
6.
FINANCE
6.1 Schemes and Global Asset Trust - Financial Statements to 31 October 2020
The Board:
a)
NOTED the report incorporating the Schemes’ financial statements for the seven months
to 31 October 2020.
b)
REQUESTED the DBPA Scheme be removed from the graph for actual net investment
returns given the scheme only holds sufficient assets to meet the future expected
expenses, with benefit payments met on a pay as you go basis by the Crown.
5
6.2 Board and Board Reserves Financial Statements to 31 October 2020
The Board:
a)
NOTED the financial statements of the Board of Trustees for the seven months ending
31 October 2020.
b)
NOTED the financial statements of the Board Reserves, for the seven months ending
31 October 2020.
9.
OTHER BUSINESS
There being no other business, the meeting finished at 11.07 am.
NEXT MEETING: The next meeting of the Board will be held in Wellington and is scheduled to
commence at
8.30am on Thursday, 25 February 2021.
RELEASED UNDER THE OFFICIAL INFORMATION ACT
6
Document Outline
