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,
and Zoom video conference
Date
Wednesday, 9 February 2022 commencing at 10.00 am
PRESENT
Edward Schuck (Chair)*
Stephen Ward
Louise Edwards
Graham Ansell*
Daniel Mussett*
Sarah Park
ACT
IN ATTENDANCE
S9(2)(a)
S9(2)(a)
S9(2)(a)
Hadyn Hunt
Ireen Muir
S9(2)(a) (for item 3.9)
* Denotes participants joined the meeting via Zoom.
INFORMATION
The 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
The Board
APPROVED the minutes of the meeting held on 6 December 2021.
OFFICIAL
2.
ADMINISTRATION
THE
2.1 Matters Arising
The Board
a)
NOTED and
DISCUSSED the Matters Arising; and
b)
REQUESTED that Management feedback on Board Strategy Paper (item 71) be presented
at next Board meeting.
UNDER
2.2 Long Term Work Calendar
The Board:
a)
NOTED the Long Term Work Plan;
b)
NOTED the review of the Liquidity Policy and Rebalancing Policy (shown as red items)
has been moved to the April-June quarter Board meeting;
c)
NOTED the Expe
RELEASED nse Benchmarking has been included in the February meeting as item
5.3;
d)
REQUESTED the Work Plan be updated to reflect reviews of the Currency Hedge Ratio
and Other Potential Asset Classes are undertaken annually;
e)
AGREED and
REQUESTED the Work Plan be amended to show actual meeting dates
rather than quarterly periods;
1
f)
NOTED it is ideal to meet Datacom face to face at the Board meeting and
REQUESTED
Datacom be invited to attend the March Board meeting (but by zoom if necessary).
2.3 Interests Register
The Board:
a)
NOTED the Interests Register; and
b)
REQUESTED the Interests Register be amended to note that
S9(2)(a)
, as of 9
March 2022, has resigned as director of
S9(2)(a)
.
3.
KEY PAPERS
3.1 Chief Executive’s Overview
ACT
The Board:
a)
NOTED the report;
b)
NOTED Annuitas has a policy that all staff are encouraged to have their Booster within 2
months of becoming eligible and that it is prepared for “Total work from home for
Annuitas” given Omicron spread;
c)
NOTED staff ‘strengths insight guide’ resulting from the Catapult training on 3 December
2021; and
d)
DISCUSSED personnel changes at Treasury.
INFORMATION
3.2 Health, Safety and Wellness Update
The Board
NOTED the Health and Safety Update and the dashboard.
3.3 Draft Response to Minister of Finance on Annual Letter of Expectations
The Board:
a)
NOTED the difference between 2020 and 2021 Enduring Letter of Expectations;
OFFICIAL
b)
DISCUSSED the draft response and suggested changes to the wording as follows:
-
Page 2, para 4 remove the word “substantially”;
THE
-
Page 2, para 5 include additional wording confirming compliance with TCFD;
c)
DELEGATED approval to Edward Schuck of the final letter to the Minister of Finance; and
d)
REQUESTED as a separate matter, Management consider excluding stocks relating to
Tobacco from the investment portfolio and revert with a recommendation to the Board.
UNDER
3.4 Investment Sub Beliefs
The Board:
a)
THANKED S9(2)(a) for drafting the paper;
b)
DISCUSSED the rationale for having separate investment sub-beliefs in writing;
c)
AGREED that separate investment sub-beliefs are not required;
d)
REQUESTED the
RELEASED draft investment sub-beliefs paper be provided to the Investment
Committee to consider whether any changes are required to the core Investment Beliefs.
3.5 Redraft of Statement of Investment Policies, Standards and Procedures (SIPSP)
The Board:
a)
NOTED that the changes to the SIPSP are stylistic rather than substantive;
b)
REQUESTED a tracked re-draft of the SIPSP be provided at the next Board meeting
incorporating comments provided by the Board.
2
3.6 Climate Change TCFD Report/Responsible Investment Update
The Board:
a)
NOTED and DISCUSSED the MSCI Carbon Analytics of NPF global and NZ equities at 31
December 2021 (Appendix 1);
b)
CONSIDERED publication of the revised Climate Change Report and
AGREED that the
annual Chair letter to members would include a brief commentary and reference the full
Climate Change Report which would be published on the website;
c)
REQUESTED the Climate Change Report be redrafted to incorporate comments from the
Board (to be provided outside the meeting) and
NOTED that the report will be updated
at 31 March 2022 for publication on NPF’s website.
3.7 Investment Managers Survey of Environmental, Social and Governance (ESG)
ACT
Factors and Climate Risks and Opportunities (CRO)
The Board
NOTED the paper and Appendix 3.7.1 showing the results of the annual survey of
NPF fund managers to determine the extent to which ESG and CRO factors affect their
investment processes.
3.8 Agreement between the Government Superannuitants Association and the
Board of Trustees of the National Provident Fund
The Board:
a)
APPROVED the Agreement;
INFORMATION
b)
APPROVED any two authorised signatories to execute the Agreement under Common
Seal on behalf of the Board.
3.9
NPPS Pension Increase Decisions
The Board:
a)
NOTED the opinion from the Actuary on mortality risk;
b)
NOTED the recommendations made by Management;
c)
RESERVED its decision on the mortality risk reserve, investment risk reserve, pension
increase policy, pension increase until the financial management framework is finalised,
whilst noting the commitment to communicate its decision to members before 31 March
2022; and
d)
REQUESTED Messrs E Schuck, D Mussett and G Ansell meet with Management to agree
the next steps to finalise the financial management framework for NPPS and then revert
to the full Board with a recommendation on any pension increase from 1 April 2022.
4.
INVESTMENTS
4.1 Quarterly Investment Report (QIR)
The Board
NOTED the report for the period ended 31 December 2021.
4.2 Investment Update
RELEASED UNDER THE OFFICIAL
The Board:
a)
NOTED the Investment Update; and
b)
APPROVED the lower Management fees for S9(2)(i);
c)
APPROVED the subscription to BMO, subject to the fees being confirmed by
Management.
5.
SCHEMES
3
5.1 Schemes Update
The Board:
a)
NOTED the paper;
b)
REQUESTED their favourable feedback on the one-page summary report be given to
Datacom; and
c)
NOTED Management update that the actuarial agreement is being reviewed by DLA Piper
and once finalised
REQUESTED that it be sent to the Board for approval by circulation.
5.2 Schemes Update - Metrics
The Board
NOTED the paper.
5.3 Schemes – Benchmarking Scheme Costs
ACT
The Board
NOTED the paper
S9(2)(j)
.
6.
FINANCE
6.1 NPF Schemes Results to 31 December 2021
The Board
NOTED the report incorporating the Scheme Financial Statements for the nine
months to 31 December 2021.
6.2 Board and Board Reserves – Results to 31 December 2021
The Board:
INFORMATION
a)
NOTED the financial statements of the Board of Trustees for the nine months ending 31
December 2021.
b)
NOTED the financial statements of the Board Reserves, for the nine months ending 31
December 2021.
7.
PAPERS FOR NOTING
OFFICIAL
The Board
NOTED the minutes of the ALCO Committee meetings held on 17 November 2021,
16 December 2021, and 17 January 2022.
THE
8.
DELEGATED DECISIONS
8.1 Use of Common Seal
The Board
NOTED the report covering the period 26 November 2021 to 30 January 2022.
UNDER
8.2 Documents signed on behalf of the Board
The Board
NOTED the report covering the period 26 November 2021 to 30 January 2022.
8.3 Management decisions made under delegated authority
The Board
NOTED the report covering the period 26 November 2021 to 30 January 2022.
9.
OTHER BUSINESS
RELEASED
Nil.
There being no other business, the meeting finished at 1.05 pm.
NEXT MEETING: The next scheduled meeting of the Board will be held in Wellington
commencing at
8.30 am on
Tuesday 29 March 2022.
4
Minutes of a
BOARD OF TRUSTEES OF THE NATIONAL PROVIDENT FUND
meeting of
(the Board)
Venue
By circulation
Date
Wednesday, 9 March 2022
PRESENT Edward Schuck (Chair)
Stephen Ward
Louise Edwards
Sarah Park
Graham Ansell
Daniel Mussett
ACT
APOLOGIES
Nil
NPPS Financial Management policy, Pension increase determination and Letter to
Members
The Board
RECEIVED:
1.
INFORMATION
a draft of the “National Provident Pension Scheme Financial Management Policy”
marked
APPENDIX 1 that had been circulated to the Board and Management;
2.
a recommendation that based on funding level of the Scheme as at 28 February
2022 of 108.4% a pension increase not be granted effective as at 1 April 2022 but
further consideration be given to pension increases when completing the financial
statements for the year ended 31 March 2022; and
OFFICIAL
3.
a proposed letter marked
APPENDIX 2 to be sent to all relevant members.
THE
The Board,
1.
APPROVED the National Provident Pension Scheme Financial Management Policy as per
APPENDIX 1;
2.
DETERMINED a pension increase not be granted effective as at 1 April 2022 and that
UNDER
further consideration be given to pension increases when completing the financial
statements for the year ended 31 March 2022; and
3.
APPROVED the letter
APPENDIX 2 be sent to all relevant members of the scheme,
subject to final changes.
RELEASED
Ireen Muir
Manager Schemes
1
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,
and Zoom video conference
Date
Tuesday, 29 March 2022 commencing at 8.30 am
PRESENT
Edward Schuck (Chair)*
Stephen Ward
Louise Edwards
Graham Ansell
Daniel Mussett*
ACT
APOLOGIES
Sarah Park
IN ATTENDANCE
S9(2)(a) , CE
S9(2)(a) , General Manager Investments*
S9(2)(a)
, General Manager Schemes
Hadyn Hunt*
Ireen Muir S9(2)(a)
*, Sean Wakelin (for item 3.5 -3.8 and 4)
Fiona Morgan, Chief Financial Officer (for item 3.9)
Visitors
INFORMATION
S9(2)(a)
from
Datacom at 9.30am for Item 3.3
* Denotes participants joined the meeting via Zoom.
The Board initially met in the absence of Management.
OFFICIAL
All Board members confirmed there were no specific interests to declare.
THE
1.
MINUTES OF THE BOARD MEETINGS
The Board
APPROVED the minutes of the meeting held on 9 February 2022 and by circulation
on 9 March 2022.
UNDER
2.
ADMINISTRATION
2.1 Matters Arising
The Board:
a)
NOTED and
DISCUSSED the Matters Arising.
b)
REQUESTED item marked log 34 – Schemes Expense Projections be given priority.
c)
NOTED item marked log 70 is overdue and not contingent on updated Russell modelling
and as per the mi
RELEASED nutes for the Investment Committee, updated recommendations on the
asset allocations for the Aircrew Scheme, the DBP Contributors Scheme and the defined
contribution schemes has been requested by the Investment Committee for consideration
at its meeting on 3 May 2022.
d)
RECEIVED an update from the General Manager, Schemes on the Actuarial Agreement,
including changes being made and fees and
REQUESTED the Management covering
paper and final draft of the Actuarial Agreement be circulated to the Board via Diligent
for approval.
1
2.2 Long Term Workplan
The Board:
a)
NOTED the Long-Term Work Plan and rescheduling based on meeting dates.
b)
NOTED the Board self-review scheduled for the May Board meeting and
REQUESTED
the CE and Chair finalise the review questionnaire and circulate to Board members.
c)
NOTED the Investment Consultant review is scheduled for the June Board meeting and
REQUESTED the terms of reference for the review be shared with the Investment
Committee.
2.3 Interests Register
The Board
NOTED the Interests Register and that there were no changes to record.
ACT
3.
KEY PAPERS
3.1 Chief Executive’s Overview
The Board:
a)
NOTED the report.
b)
NOTED updates on Covid 19 impacts on staff but all staff have access to systems that
enable them to work efficiently either from home or the office.
c)
NOTED update on staff training and planned staff workshops.
INFORMATION
d)
NOTED updates on progress of renovations of Annuitas office space and the reduced rent
based on reduced space payable from 1 January 2022.
e)
NOTED the Russell’s ESG Webinar is scheduled for 9-10am on Wednesday 20 April 2022
and
REQUESTED the CE to send calendar invitations.
f)
NOTED the potential joint zoom presentation with Ministry of Finance and Crown Financial
Institution (CFI) Boards at a time to be confirmed.
OFFICIAL
g)
NOTED CE confirmation that
Annuitas staff are BCP ready, sufficient authorised signatories
are available and that remote access to systems is checked every six months.
THE
3.2 Health, Safety and Wellness Update
The Board
NOTED the Health and Safety Update and the dashboard.
3.3 Datacom – Schemes Administration Services
UNDER
9.30 am:
S9(2)(a)
from Datacom joined the meeting.
The Board:
a)
THANKED
S9(2)(a)
from Datacom for attending the meeting.
b)
NOTED the following in particular from Datacom’s presentation:
-
new telephone network with reporting and monitoring capabilities;
-
staff are working from home and the pending office relocation;
RELEASED
-
S9(2)(i)
;
-
Datacom’s efforts to maintain contact with members and pensioners and the “gone
no address” process;
-
approximately 25% of members have elected to be contacted by email and have
provided email addresses. Additional efforts are being made to increase the use of
email; and
-
NPF and GSF are the only Datacom superannuation scheme clients requiring ful
2
administration in Australasia. Datacom is a significant payroll provider and also
provides other services including contact centre activities to large government
departments.
c)
S9(2)(g)(i)
NOTED the background paper prepared by Management,
DISCUSSE
long
term sustainability of the PIMS system, potential rewriting of the software or moving
members to PAMS once there are only pensioners in the schemes.
d)
S9(2)(j)
ACT
3.4 Board Strategy Paper
The Board
APPROVED the paper and
REQUESTED it be added to the Board induction pack.
3.5 Exclusion of Tobacco
The Board:
a)
THANKED
S9(2)(a)
for the paper.
b)
APPROVED the exclusion of tobacco companies from the NPF portfolio on the same basis
as the CFIs.
c)
APPROVED the Q&A
(Appendix 2) intended to assist the Chair and CE in responding to
INFORMATION
any media enquiries that may arise.
d)
NOTED the SIPSP would be amended to reflect the exclusion of investment in tobacco
companies.
3.6 Redraft of Statement of Investment Policies, Standards and Procedures (SIPSP)
The Board
APPROVED the SIPSP subject to insertion of new w
OFFICIAL ording for tobacco exclusion,
further comments on its content, and formatting for publishing and
DELEGATED the Chair to
provide sign-off on the final version. THE
3.7 JPM Custody Fees
The Board
APPROVED execution of the JP Morgan Addendum Fee Agreement under Common
Seal by two authorised signatories.
3.8 Power of Attorney
UNDER
The Board
APPROVED execution of the Power of Attorney in favour of Russell Investments
Implementation Services, LLC under Common Seal by two authorised signatories.
3.9 Expense Budget 2023
The Board:
a)
REVIEWED and
DISCUSSED the proposed budget for the year to 31 March 2023.
b)
NOTED
S9(2)(i)
investment management performance fees, which the CFO confirmed
RELEASED
are correct from an accounting perspective.
c)
NOTED the travel budget and that all overseas travel (excluding Australia) is subject to
prior approval by the Chair and that it was reasonable to budget for travel FYE 2023 noting
there was limited ability to travel during 2020-2021.
d)
APPROVED the Gross Expense Budget of $11.573 million and a Capital Budget of $380,000
for the year to 31 March 2023.
3
4. INVESTMENTS
4.1 Investment Update
The Board:
a)
NOTED the Investment Update and verbal update provided by the General Manager
Investments:
-
Preliminary estimated returns for the total Fund were down 0.9% for the March
month to date bringing returns for FYTD to 1.8% before tax and expenses.
Comparatively, for March month to date the fixed interest sector had a -2.6% return
given rising bond yields.
-
Noted the increase in carbon intensity as a result of out-performance by energy
stocks and some managers being overweight energy stocks. This exposure is
ACT
expected to reduce with the transition to the new low carbon fund.
b)
NOTED the favourable DAA performance over the whole period since inception and that
the DAA performance is net of costs and based on actual unit returns.
c)
REQUESTED Management provide a verbal update to the Board where significant market
changes occur that are expected to impact on the funding level for NPPS since month end
results reported in the Schemes Update Metrics paper.
4.2 Review of Custodian and Securities Lending
The Board:
INFORMATION
a)
NOTED the paper.
b)
NOTED collateral for securities lending is ‘bond for bond plus margin’ and there are
constraints around counterparty risk.
c)
NOTED that voting on securities is undertaken by the investment managers and the
reporting on voting metrics is outsourced by J P Morgan to Broadridge.
OFFICIAL
5.
SCHEMES
5.1 Schemes Update
THE
The Board:
a)
NOTED the paper.
b)
S9(2)(i)
UNDER
c)
S9(2)(i)
5.2 Schemes Update - Metrics
The Board:
a)
NOTED the paper
b)RELEASED
REQUESTED that the funding level for the DBPC be presented in a similar manner to the
NPPS and a chart be added to the metrics paper in future Board packs, from May onward.
c)
NOTED verification will be provided by the Actuary of the methodology used by
Management when calculating the NPPS funding level and suggested that the Actuary be
made aware of the Board’s expectation that all future valuations be carried out on an
economic value basis.
6.
FINANCE & RISK
4
6.1 Schemes Results to 28 February 2022
The Board:
a)
NOTED the report incorporating the Scheme Financial Statements for the eleven months
to 28 February 2022.
b)
REQUESTED the total benchmark figures on the asset allocations page in the Scheme
results (item 6.1.1) be updated.
6.2 Board and Board Reserves Financial Statements 31 January 2022
The Board:
a)
NOTED the financial statements of the Board of Trustees for the ten months ending 31
January 2022.
ACT
b)
NOTED the financial statements of the Board Reserves, for the ten months ending 31 January
2022.
6.3 Policy Review
The Board
APPROVED NPF5 Risk Policy and
REQUESTED that in future the Board be provided
tracked versions.
7.
PAPERS FOR NOTING
The Board
NOTED the minutes of the ALCO Committee meeting held on 15 February 2022 and
REQUESTED reference to ‘PCAS” be removed.
INFORMATION
8.
DELEGATED DECISIONS
8.1 Use of Common Seal
The Board
NOTED the report covering the period 31 January 2022 to 20 March 2022.
OFFICIAL
8.2 Documents signed on behalf of the Board
The Board
NOTED the report covering the period 31 January 2022 to 20 March 2022.
THE
8.3 Management decisions made under delegated authority
The Board
NOTED the report covering the period 31 January 2022 to 20 March 2022.
UNDER
9.
OTHER BUSINESS
Nil.
There being no other business, the meeting finished at 12.20 pm.
NEXT MEETING: The next scheduled meeting of the Board will be held in Wellington
commencing at
8.30 am on
Tuesday 17 May 2022.
RELEASED
5
Minutes of a
BOARD OF TRUSTEES OF THE NATIONAL PROVIDENT FUND
meeting of
(the Board)
Venue
By circulation
Date
Wednesday, 5 April 2022
PRESENT Edward Schuck (Chair)
Stephen Ward
Louise Edwards
Sarah Park
Graham Ansell
Daniel Mussett
ACT
APOLOGIES
Nil
Reappointment of Christine Ormrod of PricewaterhouseCoopers (PWC) as Actuary to
the Board
The Board
RECEIVED:
INFORMATION
1.
the final Actuarial Services Agreement (
Agreement) negotiated between
Management and PricewaterhouseCoopers (
PWC) marked
APPENDIX 1; and
2.
the following recommendations:
a.
APPOINT Christine Ormrod as Actuary to the NPF Schemes for a period of three
years from 31 March 2022 to 30 March 2025; an
OFFICIAL d
b.
AUTHORISE Management to execute the Actuarial Services Agreement with
PWC and the Actuary under Common Seal.
THE
The Board,
1.
APPOINTED Christine Ormrod as Actuary to the NPF Schemes for a period of three
years from 31 March 2022
UNDER to 30 March 2025; and
2.
AUTHORISED Management to execute the Actuarial Services Agreement with PWC
and the Actuary under Common Seal.
RELEASED
1
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,
and Zoom video conference
Date
Tuesday, 17 May 2022 commencing at 8.30 am
PRESENT
Edward Schuck (Chair)
Stephen Ward
Louise Edwards
Graham Ansell
Daniel Mussett
Sarah Park
ACT
APOLOGIES
Nil
IN ATTENDANCE
S9(2)(a) , CE
S9(2)(a) General Manager Investments
S9(2)(a)
General Manager Schemes
Hadyn Hunt, Ireen Muir, S9(2)(a) *,
Sean Wakelin (for item 4)
Visitors
Christine Ormrod*, PWC, Actuary
INFORMATION
* Denotes participants joined the meeting via Zoom.
The Board initially met in the absence of Management.
All Board members confirmed there were no specific interests to declare.
OFFICIAL
1.
MINUTES OF THE BOARD MEETINGS
The Board:
THE
a)
APPROVED the minutes of the meeting held on 29 March 2022 and by circulation on 5
April 2022.
b)
NOTED the draft minutes for the Investment Committee meeting held on 3 May 2022,
which are subject to approval by Investment Committee at its next meeting.
UNDER
c)
NOTED that it is useful to see the draft minutes for the Committee meetings in Board
meeting papers and
REQUESTED they continue to be included in future.
2.
ADMINISTRATION
2.1 Matters Arising
The Board:
RELEASED
a)
NOTED and
DISCUSSED the Matters Arising.
b)
REQUESTED a progress update be provided to the next Board meeting together with
expected timeframe for completion of item marked log 34 – Schemes Expense
Projections.
c)
RECEIVED an update from CE on item marked log 86, Climate Change TCFD
Report/Responsible Investment, that additional meetings have been arranged with
responsible investments teams at ACC and NZ Super Fund for further collaboration.
2.2 Long Term Work Plan
The Board:
1
a)
NOTED the Long-Term Work Plan and rescheduling based on meeting dates.
b)
RECEIVED an update from the General Manager, Schemes as follows:
-
recommendations on the earning rates for the defined contribution and personal
scheme will be circulated to the Board prior to the next Board meeting
S9(2)(i)
and
-
the Actuary provides letters on the actuarial position of the schemes for the financial
statements. The full actuarial valuation reports will be presented to the Board later
in the year.
2.3 Interests Register
ACT
The Board
NOTED the Interests Register and that there were no changes to record.
3.
KEY PAPERS
3.1 Chief Executive’s Overview
The Board:
a)
NOTED the report.
b)
ENQUIRED about productivity levels with staff working from home and
RECEIVED
confirmation from Management that productivity levels remain high, there are certain days
INFORMATION
when all staff work from the office, but greater collaboration is achieved when staff are
physically present in office.
c)
RECEIVED an update from CE that the initial building works on Annuitas’ premises are
expected to take place from mid-June until the end of July therefore the Annuitas Board
room may not be available and
REQUESTED the NPF June ARRC meeting (14 June) and
Board meeting (28 June) be held in person at another venue (to be arranged and confirmed
by CE).
OFFICIAL
d)
NOTED the change in the key relationship contact at Treasury.
e)
CONFIRMED 19 October and 8 December 2022 for Board meetings and
REQUESTED
THE
they be scheduled.
f)
DISCUSSED cyber security risk and
REQUESTED Management report to the Audit and
Risk Review Committee (prior to Board) addressing matters listed below:
-
What are the core critical data information needs if systems were down? What is the
risk level? UNDER
-
What is the impact if systems were down for a period?
-
What steps are being taken or have been taken to secure the systems?
-
What action will be taken if the risk materialised - scenario planning?
-
Robustness of processes and readiness, including from risk of foreign interference
and inappropriate influence.
3.2
RELEASED
Health, Safety and Wellness Update
The Board
NOTED the Health, Safety and Wellness Update and the dashboard.
2
3.3 NPPS- Pension Purchase Factors
9.45 am: Christine Ormrod, PWC, Actuary joined the meeting.
The Board:
a)
DISCUSSED the recommendations with the Actuary and
NOTED the Actuary’s advice on
the new basis for determining the transfer of assets between the NPF Schemes and the
National Provident Pension Scheme.
b)
Matters discussed:
-
The Scheme needs a simple methodology for calculation of pensions.
-
While the number of new pensions being purchased is low, calculation on an
individual basis is not feasible given the need to minimise costs and system
changes.
ACT
-
The yield curve (incorporated in the new methodology) will move over time and
will therefore be updated monthly and intra-month for any significant change.
-
Calculation of the funding level and the pension factors.
-
Administration cost is estimated using current valuation, mortality changes and
assumption that new pensioners will be younger.
-
While administration cost cannot be directly compared due to lack of similar
comparable schemes and data, the amount is reasonable and will be subject to
review going forward.
INFORMATION
-
Reserving of expenses - whether expense monies should be held and drawn down
separately as an explicit value item that is updated over time and how it could be
treated for accounting purposes.
-
The inclusion of the expense treatment in the NPPS framework.
c)
REQUESTED approval of the paper be completed by circulation, with additional
information provided to confirm the scheme’s future administration expenses will be
OFFICIAL
borne equitably by members and explain how transparency of the administration cost will
be addressed.
d)
THANKED Christine Ormrod for attending the meeting.
THE
Christine Ormrod left the meeting.
3.4
SAA Reviews - Aircrew Scheme, DBP Contributors Scheme, Large DC Schemes,
and Lump Sum Cash Accum
UNDER
ulation Scheme
The Board
DISCUSSED the papers under Item 3.4 and 3.5 together and
APPROVED the
following:
Aircrew Scheme
a)
The key parameters for the Scheme as follows:
RELEASED
-
Risk Budget: not more than a 1 in 3 chance of the TA/TB falling below 100% after
five years and
-
Target TA/TB Ratio: 100%.
3
b)
The new SAA as shown below.
Unit Fund
SAA for Current Portfolio
New
SAA
O Fund
32%
15%
E Fund
8%
5%
F Fund
60%
F2 Fund
~38%*
C Fund
~42%*
100%
100%
*Subject to adjustment depending on both the future duration of the
scheme and the duration of the F2 (L) Unit, which is dynamical y managed.
ACT
c)
The trigger for implementing the new SAA is when the TA/TB Ratio reaches 105% at
any future month end. The 5% margin over the target TA/TB Ratio of 100% is to
provide for any asset and liability volatility between implementation of new SAA and
execution (timing risk).
d)
Monthly consideration at the Management Rebalancing Committee
(ALCO) meeting of the
following:
- the trigger for implementing the new SAA; and
-
post-implementation of the new SAA, the allocation between the Cash Fund and F2
(defensive allocation), which aligns with the 3-year duration of the Scheme
INFORMATION
liabilities, to ensure the duration matching remains within 0.5 years.
DBP Contributors Scheme
a)
The key parameters for the Scheme as follows:
-
Risk Budget: not more than a 5% chance of the funding level being below 100%
OFFICIAL
after three years; and
-
Target Funding Level: for the next 3 years is 100%.
b)
The new SAA effective from 1 July 2022
(or earlier) and from when the Funding Level
THE
reaches 103% at any future month end (or even prior to 1 July 2022) are as shown
below.
Unit Fund
SAA for Current
New SAA Effective
New SAA when Funding
Portfolio
from 1 July 2022
Level reaches 103%
UNDER
O Fund
20%
15%
0%
E Fund
5%
0%
F Fund
80%
F2 Fund
30%
~37%*
C Fund
50%
~63%*
100%
100%
100%
*Subject to adjustment depending on both the future duration of the scheme and the
duration of the F2 (L) Unit, which is dynamical y managed.
RELEASED
c)
The trigger for implementing the new SAA with zero allocation to equities is 103%. The
3% margin over the Target Funding Level of 100% is to provide for any asset and
liability volatility between implementation of new SAA and execution (timing risk).
d)
Monthly consideration at the Management Rebalancing Committee
(ALCO) meeting of the
following:
- the trigger for implementing the new SAA; and
4
-
post-implementation of the new SAA, the allocation between the Cash Fund and F2
(defensive allocation), which aligns with the 3-year duration of the Scheme
liabilities, to ensure the duration matching remains within 0.5 years.
Large DC Schemes - (Pension National, Lump Sum National and Meat Industry
Schemes)
a)
The key parameters for the Schemes as follows:
-
Investment Objective: to achieve an annual average return of not less than 4%,
net of tax and expenses, during the next 10 years. This is the minimum earnings
rate set out in the Schemes’ trust deeds.
-
Risk Budget: not more than a 40% chance that after five years the Schemes will be
in deficit, in the sense that the contributors’ total credits exceed the corresponding
ACT
assets.
b)
Retention of the current SAA with a 50% asset allocation to growth assets.
Lump Sum Cash Accumulation Scheme
a)
The key parameters for the scheme as follows:
-
Investment Objective: to achieve an average investment return of not less than 4%
pa, net of tax and expenses, over the next seven years subject to a high level of
liquidity being maintained. The Scheme is required to have a high level of liquidity
to meet entitlements as they fall due. The entitlements are not predictable and are
INFORMATION
subject to member election.
-
Risk Budget: no more than a 1 in 2 chance that after five years the Scheme will be
in deficit.
b)
Retention of the current SAA with a 50% asset allocation to growth assets.
3.5 Aircrew and DBP Contributors Schemes – Frameworks
OFFICIAL
The Board:
a)
DISCUSSED and
APPROVED the frameworks for the Aircrew Scheme and the DBP
Contributors Scheme, subject to the frameworks being amended to address the Board’s
THE
comments, none of which impact on the approvals under 3.4.
b)
REQUESTED that amended frameworks be provided to the Chair for review.
3.6 Investment Core Beliefs
The Board:
UNDER
a)
CONSIDERED and APPROVED the Core Investment Beliefs.
b)
NOTED the SIPSP will be revised accordingly.
c)
NOTED the Core Investment Beliefs are published on website by way of incorporation
into the SIPSP.
d)
NOTED the sub-beliefs are intended for internal reference purposes, not for publication,
and will be redrafted once the Core Beliefs are approved.
RELEASED
e)
REQUESTED that future investment decision papers include consideration of the
relevant Core and Sub -Beliefs.
3.7
Board Self Review
The Board:
a)
NOTED the changes to the Board self-review questionnaire and
REQUESTED:
-
Question 2 be amended to replace “business model and key value drivers” with
“operating model and key performance indicators”.
-
Question 13 be retained.
5
-
The questionnaire will be circulated after this meeting for Board members to
complete accordingly, with responses due by 3 June 2022.
b)
NOTED that given the shared ownership/governance structure of Annuitas, any
feedback from Board members may be given to the Chair to take up at the Annuitas
board level.
c)
REQUESTED the requirement for informal exit interviews conducted by the Chair with
departing Board members be noted in the exit checklist.
4. INVESTMENTS
4.1
Quarterly Investment Report
The Board:
ACT
a)
NOTED the Quarterly Investment Update and verbal update provided by the General
Manager Investments.
b)
DISCUSSED S9(2)(i) and Management’s advice that the manager has not met
performance expectations relative to its S9(2)(i)
benchmark.
c)
REQUESTED amendments to Table C:
-
Returns since inception are not comparable across managers and DAA as the
strategies have different inception dates.
-
Manager ratings are the latest data available; and INFORMATION
-
the benchmark for S9(2)(i) and F2 Fund be replaced with “Cashflow matched”.
4.2
Investment Update
The Board:
a)
NOTED the Investment Update and verbal update provided by the General Manager
Investments:
OFFICIAL
-
Preliminary estimated returns for the FYTD to 13 May were S9(2)(i) for the total Fund
and ranged from S9(2)(i)for DBPA toS9(2)(i) for DC schemes.
-
Noted the increase in carbon intensity due to some managers being overweight
energy stocks that had out-perform
THE ed significantly. This exposure is expected to
reduce with the transition to the new
S9(2)(i)
fund.
4.3
Capital Market Assumptions
The Board:
UNDER
a)
NOTED the Annuitas Capital Market Assumptions at 31 March 2022.
b)
NOTED the Annuitas Capital Market Assumptions have been shared with the Actuary
and Russell Investments.
5.
SCHEMES
5.1
Schemes Update
RELEASED
The Board:
a)
NOTED the paper.
b)
NOTED that a pension increase for NPPS will be considered in accordance with the
agreed framework as part of the Board’s review of the final financial statements at year
end and will be based on the 31 March 2022 funding level for the scheme.
5.2
Schemes Update - Metrics
The Board:
a)
NOTED the paper.
6
6.
FINANCE & RISK
6.1 NPF Annual Financial Statements
The Board:
a)
NOTED the paper providing an update on the results for the year and progress with the
preparation of the financial statements and audit.
b)
RECEIVED confirmation from Management that the auditors have completed the IT audit
with no issues being raised.
6.2 NPF Year End Results and Board and Board Reserves
The Board:
ACT
a)
NOTED the draft financial reports for the Board and Board Reserves for the year ended
31 March 2022.
b)
NOTED the Board Reserves can be used in relation to any scheme subject to approval from
Minister of Finance.
7.
PAPERS FOR NOTING
The Board:
a)
NOTED the minutes of the ALCO Committee meetings held on 21 March and 26 April
2022.
INFORMATION
b)
REQUESTED that as per the new SAAs approved under Item 3.4, future ALCO
Committee meetings minutes record the consideration of the triggers for implementation
of new SAAs for the Aircrew and DBPC Schemes and post-implementation, any changes
to the allocation of assets between the Cash Fund and F2 Fund.
8.
DELEGATED DECISIONS
OFFICIAL
8.1 Use of Common Seal
The Board
NOTED the report covering the period 21 March 2022 to 8 May 2022.
THE
8.2 Documents signed on behalf of the Board
The Board
NOTED the report covering the period 21 March 2022 to 8 May 2022.
8.3 Management decisions made under delegated authority
The Board
NOTED the report coverin
UNDER g the period 21 March 2022 to 8 May 2022.
9.
OTHER BUSINESS
Nil.
There being no other business, the meeting finished at 12.30 pm.
RELEASED
NEXT MEETING: The next scheduled meeting of the Board will be held in Wellington
commencing at
8.30 am on
Tuesday 28 June 2022.
7
Minutes of a
BOARD OF TRUSTEES OF THE NATIONAL PROVIDENT FUND
meeting of
(the Board)
Venue
By circulation
Date
26 May 2022
PRESENT Edward Schuck (Chair)
Stephen Ward
Louise Edwards
Sarah Park
Graham Ansell
Daniel Mussett
ACT
APOLOGIES
Nil
NPF DEFINED CONTRIBUTION SCHEMES AND LUMP SUM CASH ACCUMULATION
SCHEME - EARNINGS RATES
1. The Board
RECEIVED:
(i)
A paper from Management with the Actuary’s recommendations, with respect to the
INFORMATION
Pension National, Lump Sum National and Meat Industry Schemes (together referred
to as
Defined Contribution Schemes) and the Lump Sum Cash Accumulation
Scheme (
LSCAS) in relation to:
•
Earnings Rates for the Defined Contribution Schemes and LSCAS.
•
Transfer Value Earnings Rates for the Defined Contribution Schemes and LSCAS.
•
Administration costs for transfer for the Defined Contribution Schemes and LSCAS.
OFFICIAL
(ii)
A spreadsheet marked
Appendix 1 confirming the investment returns for the year to
31 March 2022, that had been agreed by the finance team and the Actuary.
THE
2. The Board, based on the advice of the Actuary,
RESOLVED as noted below.
Pension National Scheme
UNDER
(i)
DECLARED, in accordance with clause 16.1 of the Pension National Scheme trust
deed, an Earnings Rate of 4.0% per annum be applied to each Contributor's Total
Credit as at 1 April 2021.
(ii)
DETERMINED, 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 2021 to 31 March 2022 shall be at the rate of 1.6%.
(iii)
DETERMINED, for the purposes of clauses 31B.3 and 31B.4 of the Pension National
RELEASED
Scheme trust deed, the Transfer Value Earnings Rate (to apply from the effect date of
transfer to the date of payment of the transfer value) for the Pension National Scheme
from 26 May 2022 until further notice shall be at the rate of 4.0% per annum.
1
Lump Sum National Scheme
(i)
DECLARED, in accordance with clause 14.1 of the Lump Sum National Scheme trust
deed, that an Earnings Rate of 4.0% per annum be applied to each Contributor's Total
Credit as at 1 April 2021.
(ii)
DETERMINED, in accordance with clause 14.2 of the Lump Sum National Scheme
trust deed, the basis for al ocating earnings to contributions paid to the Lump Sum
National Scheme during the period 1 April 2021 to 31 March 2022 shall be at the rate
of 1.6%.
(iii)
DETERMINED, 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
effect date of transfer to the date of payment of the transfer value) for the Lump Sum
ACT
National Scheme from 26 May 2022 until further notice shal be at the rate of 4.0%
per annum.
Meat Industry Scheme
(i)
DECLARED, in accordance with clause 16.1 of the Meat Industry Scheme trust deed,
that an Earnings Rate of 4.0% per annum be applied to each Contributor's Total Credit
as at 1 April 2021.
(ii)
DETERMINED, in accordance with clause 16.3 of the Meat Industry Scheme trust
INFORMATION
deed, the basis for allocating earnings to contributions paid to the Scheme, during the
period 1 April 2021 to 31 March 2022 shall be at the rate of 2.0%.
(iii)
DETERMINED, 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 effect date of
transfer to the date of payment of the transfer value) for the Meat Industry Scheme
from 26 May 2022 until further notice shal be at the rate of 4.0% per annum.
OFFICIAL
Lump Sum Cash Accumulation Scheme
THE
(i)
DECLARED, in accordance with Clause 11.1 of the Scheme trust deed, an Earnings
Rate of 4.00% per annum to apply from 26 May 2022 until further notice.
(ii)
DETERMINED, for the purposes of clauses 19B.3 and 19B.4 of the Lump Sum Cash
Accumulation Scheme trust deed, the Transfer Value Earnings Rate (to apply from the
UNDER
effective date of transfer to the date of payment of the transfer value) for the Lump
Sum Cash Accumulation Scheme from 26 May 2022 until further notice shall be at the
rate of 4.0% per annum.
3. The Board, with respect to
Defined Contribution Schemes and LSCAS:
RELEASED
(i)
REQUESTED additional information on the administration fees on transfer.
(ii)
APPROVED, based on the advice of the Actuary, 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%.
Ireen Muir,
Manager Schemes
2
Minutes of a
BOARD OF TRUSTEES OF THE NATIONAL PROVIDENT FUND
meeting of
(the Board)
Venue
By circulation
Date
Sent 31 May 2022, last approval 8 June 2022
PRESENT Stephen Ward
Louise Edwards
Sarah Park
Graham Ansell
Daniel Mussett
APOLOGIES
Edward Schuck (Chair)
ACT
The Board:
1.
APPROVED the appointment of
S9(2)(i)
for a cash portfolio.
2.
APPROVED the fees of S9(2)(i).
INFORMATION
3.
NOTED that the investment will be in a unit trust not a separately managed portfolio,
so there will not be an Investment Management Agreement but there will be some
other documentation requirements from S9(2)(i)
4.
NOTED that the S9(2)(i) investment will not be in custody.
OFFICIAL
5.
AUTHORISED execution of documents under the use of the Common Seal by two
Authorised Signatories if required.
THE
UNDER
S9(2)(a)
Manager, Investments
RELEASED
1
Minutes of a
BOARD OF TRUSTEES OF THE NATIONAL PROVIDENT FUND
meeting of
(the Board)
Venue
By circulation
Date
9 June 2022
PRESENT Edward Schuck (Chair)
Stephen Ward
Louise Edwards
Sarah Park
Graham Ansell
Daniel Mussett
ACT
APOLOGIES
Nil
NPF SCHEMES – Pension purchase factors for National Provident Pension Scheme
(NPPS) and administration fees on transfer for Defined Contribution Schemes and the
Lump Sum Cash Accumulation Scheme
1. The Board
RECEIVED:
(i)
A paper from Management covering the following: INFORMATION
•
Basis for determining the transfer of assets between the NPF Schemes and the
NPPS and the new methodology for calculating the amount of pension purchased
from the NPPS to be applied from June 2022.
•
Additional information on administration fees on transfer for the Defined
Contribution and Lump Sum Cash Accumulation Schemes.
(ii)
The paper on the NPPS Pension Purchase Factors presented to the 17 May 2022
OFFICIAL
Board meeting, marked as
Appendix 1.
(iii)
PWC draft letter showing expense provision for NPPS for financial year ended 31 March
2022, marked as
Appendix 2.
THE
(iv)
A spreadsheet showing the impact of administration fees on transfer for the Pension
National Scheme, by way of example, marked as
Appendix 3.
2. The Board:
UNDER
(i)
NOTED the Actuary’s advice on the basis for determining the transfer of assets
between the NPF Schemes and the NPPS.
(ii)
Based on the recommendation of the Actuary:
a)
APPROVED the new methodology for calculating the amount of pension
purchased from the National Provident Pension Scheme to be applied from June
RELEASED
2022; and
b)
NOTED the pension factors wil be reviewed by the Actuary annually going
forward.
(iii)
NOTED the additional information provided on administration fees on transfer for the
Defined Contribution and Lump Sum Cash Accumulation Schemes.
Ireen Muir,
Manager Schemes
1
ACT
INFORMATION
OFFICIAL
THE
UNDER
RELEASED
c)
REQUESTED that future ALCO minutes should specifically address the monitoring of the
F2 Fund in terms of duration matching, duration complexity and yield vs liabilities in the
schemes and action taken.
d)
AGREED that ALCO is an operational management meeting (acting within management
delegations), but Board members are welcome to attend the meeting.
2.
ADMINISTRATION
2.1 Matters Arising
The Board:
a)
NOTED and
DISCUSSED the Matters Arising.
ACT
b)
NOTED confirmation from the Chair that Item 109 had been completed and that
Management will convert the agreed frameworks into policy documents.
c)
NOTED item 112 has been completed.
2.2 Long Term Work Plan
The Board:
a)
NOTED and
DISCUSSED the Long Term Work Plan.
INFORMATION
b)
RECEIVED advice from Management that the Actuarial Reviews for DBPC, DBPA, NPPS and
Aircrew schemes and the Transfer Basis for transfers from DBPC to DBPA are unlikely to be
finalised before August and
REQUESTED the items be moved from June to August in the
workplan.
2.3 Interests Register
OFFICIAL
The Board
NOTED the Interests Register and
S9(2)(a)
confirmation of his appointment
as
S9(2)(a)
.
THE
3.
KEY PAPERS
3.1 Chief Executive’s Overview
UNDER
The Board:
a)
NOTED the report and the verbal update provided by S9(2)(a) .
b)
NOTED the Chair and S9(2)(a) will put forward to the Board at its August meeting
proposed dates once the new Board members have been appointed (including whether
the meeting would be in person or via zoom).
c)
RECEIVED an update from S9(2)(a) that the initial building works on Annuitas’
RELEASED
premises have been completed and staff have returned to the office. Dates for the next
stage of building works are yet to be confirmed.
3.2 Health, Safety and Wellness Update
The Board
NOTED and
DISCUSSED the Health and Safety Update and the dashboard.
3.3 Board Self-Review
2
The Board
CONFIRMED that the Board self-review has been completed, was discussed during
Board only time and that no matters arose from the review that the Board was not already
aware of or that the Board wished to raise with Management.
3.4 Financial Statement Review Process
The Board:
a)
NOTED the report on the Financial Statement review process and verbal updates from
S9(2)(a)
that the
review process went smoothly.
b)
NOTED the draft minutes of the Audit & Risk Review Committee meeting held on Tuesday
14 June 2022 (see Agenda item 1.2.1).
ACT
3.5 Report from Auditor
a)
NOTED and
DISCUSSED the Auditor’s report.
b)
NOTED the Auditor did not identify any significant deficiencies in internal controls which
would impact upon his ability to provide his opinion or control observations but
NOTED
the control observation that the investments at year end were not consistent with the
published Statement of Investment Policies, Standards and Procedures (SIPSP).
c)
RECEIVED confirmation from S9(2)(a)
that investments at year end are consistent
with the now-revised SIPSP and that draft SIPSP provided to the Auditor was not
INFORMATION
accurate.
d)
REQUESTED that updates to SIPSP be monitored more tightly and published on the
website more promptly.
e)
NOTED the thresholds used for materiality by the Auditor and
RECEIVED confirmation
from S9(2)(a)
that the audit threshold is applied for financial statements disclosure
and impacts on Auditor’s sampling size (which was high) but a lower threshold is applied
OFFICIAL
internally.
f)
NOTED that Climate-related Financial Disclosures are not required to be included in the
2022 financial statements and are outsi
THE de of audit scope but once the standards have
been developed for the External Reporting Board (XRB) framework, the disclosures would
need to be included in financial statements and wil be audited.
g)
AGREED Management’s responses to the internal control findings were appropriate.
3.6
UNDER
Representations
The Board:
a)
NOTED the representations from Management and verbal update from
S9(2)(a) that
three Management Representation Letters had been prepared for 2022 (as opposed to
the usual one), and mirrored the representations required from the Board to the Auditor.
b)
CONSIDERED Management’s answers to sections 1-13 of the questionnaire.
RELEASED
c)
REVIEWED and
COMPLETED section 14 of the questionnaire (in particular that
response to 14.14 is ‘negative’ and 14.15 is ‘not applicable’) and
AUTHORISED the
Chair, and Stephen Ward, as Chair of the Audit & Risk Review Committee, to
SIGN (by
way of electronic signature) the questionnaire on behalf of the Board.
3
d)
CONSIDERED and
AUTHORISED the Chair, and Stephen Ward, as Chair of the Audit &
Risk Review Committee, to
SIGN (by way of electronic signature) the representation
letters to the Auditor.
3.7 Financial Statements 2022 – Board of Trustees of the National Provident Fund
The Board:
a)
NOTED the financial statements of the Board of Trustees of the National Provident Fund
for the year ended 31 March 2022.
b)
RESOLVED to:
i)
APPROVE and
ADOPT the Board of Trustees of the National Provident Fund ACT
financial statements for the year ended 31 March 2022.
ii)
AUTHORISE the Chair and Stephen Ward, as the Chair of the Audit and Risk
Review Committee, to
SIGN (via electronic signature), on behalf of the Board, the
Board of Trustees of the National Provident Fund financial statements for the year
ended 31 March 2022.
3.8 Financial Statements 2022 – Global Asset Trust
The Board:
INFORMATION
a)
NOTED the financial statements of the Global Asset Trust for the year ended 31 March
2022 and the review undertaken by the Audit and Risk Review Committee.
b)
DISCUSSED and
NOTED Management’s advice regarding the internal controls in place
for the monitoring, review, and approval of performance fee calculations.
c)
RESOLVED to:
OFFICIAL
i)
APPROVE and
ADOPT the Global Asset Trust financial statements for the year
ended 31 March 2022. THE
ii)
AUTHORISE the Chair and Stephen Ward, as the Chair of the Audit and Risk
Review Committee, to
SIGN (via electronic signature), on behalf of the Board, the
Global Asset Trust financial statements for the year ended 31 March 2022.
3.9 Financial Statements 2022 – NPF Schemes
UNDER
The Board:
a)
NOTED the review undertaken by, and subsequent recommendation of, the Audit and
Risk Review Committee with respect to the financial statements for the NPF Schemes for
the year ended 31 March 2022.
c)
DISCUSSED the actuarial notes included in the financial statements for the Aircrew
Superannuation Scheme,
AGREED that the content is technically correct and
RELEASED
REQUESTED that Management discuss the content with the Actuary with a view to
having the note simplified and utilising a single funding level basis in the future.
d)
RESOLVED to:
i)
APPROVE and
ADOPT the financial statements for the year ended 31 March 2022
for all eight NPF Schemes.
4
ii)
AUTHORISE the Chair and Stephen Ward, as the Chair of the Audit and Risk
Review Committee, to
SIGN (via electronic signature), on behalf of the Board, the
financial statements for the year ended 31 March 2022 for all eight NPF Schemes.
3.10 Section 67 (1A) Report at 31 March 2022
The Board:
a)
NOTED the report.
b)
REQUESTED paragraph A2(D) be reworded to confirm changes made to actuarial bases
and
NOTED the report will be amended to reflect the Board’s decision on the NPPS
pension increase.
ACT
3.11 National Provident Pension Scheme – pension increase consideration
The Board:
a)
NOTED and
DISCUSSED Management’s recommendation and
RESOLVED that pensions
in payment as at 31 March 2022 will be increased by 2% from the 4 August 2022 pension
payment date.
3.12 Chair’s Letter and Summary Annual Reports - 2022
The Board:
INFORMATION
a)
RECEIVED advice from Management that the annual reports need to be filed with the
Financial Markets Authority by 31 July and needed to be with the printer by 15 July.
b)
CONFIRMED the Chair’s letter subject to comments noted below and
DELEGATED the
final approval to the Chair:
i) include additional words for context in the sentence “NPF Managers added value” in
OFFICIAL
2nd paragraph under the heading “Investments”;
ii) Simplify 3rd and 4th paragraph under the heading “Investments”.
THE
c)
NOTED and
CONFIRMED the format of the summarised annual report for 2022 and
REQUESTED the final form be sent to the Board by circulation, incorporating comments
below:
i) include a simple paragraph on pension increase for NPPS but the wording needs to
UNDER
create the correct expectation that the decision on pension increase is dependent
each year on the funding level of the scheme;
ii) simplify the disclosures on funding levels for Aircrew Superannuation Scheme S9(2)(i)
iii) Correct typo (all schemes) under “investment performance” where word “has” should
be replaced with “have”.
RELEASED
3.13 Investment Sub-Beliefs
The Board:
a)
NOTED the Investment Beliefs and the redrafted Sub-Beliefs and
RECEIVED
confirmation from S9(2)(a) that there were no comments from the Investment
Committee review and, while the Sub-Beliefs will be reviewed to ensure they remain
current, they are not expected to change over the next 3 years.
5
b)
NOTED the Sub-Beliefs are intended for internal reference purposes only and are not in
the SIPSP.
3.14 Investment Consultant Review
The Board:
a)
NOTED the paper and received a verbal update from S9(2)(a) .
b)
S9(2)(i)
c)
S9(2)(i)
ACT
INFORMATION
d)
S9(2)(i)
e)
S9(2)(i)
OFFICIAL
f)
S9(2)(i)
THE
g)
S9(2)(i)
.
3.15 Cyber Update
The Board:
UNDER
a)
NOTED the paper and received a verbal update from S9(2)(a) .
b)
S9(2)(g)(i)
c)
S9(2)(i)
RELEASED
3.16 NPF Emissions Inventory Board Paper
The Board:
a)
NOTED the corporate Greenhouse Gas Emissions Inventory Report for the NPF Board for
the year ending March 2022 and
COMPLIMENTED S9(2)(a)
on the initiatives taken
to measure emissions and on the quality of the paper.
6
b)
NOTED that this report will be used as the basis for identifying possible reductions in
corporate emissions.
c)
NOTED that this report has not been independently verified and is not published.
d)
DISCUSSED the idea of deeming some future Board meetings as zoom meetings to
ensure air travel is managed,
AGREED that some Board and Committee meetings are
best conducted in person and
REQUESTED that Management take into consideration
emissions and the workplan when reviewing and recommending FY 2023 Board meeting
dates.
4. INVESTMENTS
4.1 Quarterly Investment Report
ACT
The Board:
a)
NOTED the report and received a verbal update from S9(2)(a) .
b)
S9(2)(i)
S9(2)(a)
S9(2)(i)
INFORMATION
4.2 Responsible Investment Update
The Board:
a)
NOTED the report, which covered the Fund’s current ESG developments, including
managers’ ESG-related reports, an MSCI ESG equity portfolio summary report, company
engagements, and other relevant updates.
OFFICIAL
b)
REQUESTED Management’s future comments on the data take account of ‘non-reported’
data.
THE
c)
REQUESTED that future updates be provided quarterly.
4.3 Rebalancing Review
The Board:
UNDER
a)
NOTED the Rebalancing Policy Review letter from Russell.
b)
S9(2)(g)(i)
c)
NOTED Russell will review and certify compliance with the policy as part of their pending
SIPSP review.
RELEASED
4.4 Climate Change TCFD Report
The Board:
a)
NOTED that the report shows carbon intensity as at 31 March 2022. The report will be
updated to 30 June before being finalised and approved for publication on NPF’s website.
b)
NOTED that the report concentrates on the investment portfolio implications not the
business operational implications.
7
c)
REQUESTED that the report be re-drafted to:
i)
incorporate outcomes reported in the NPF Corporate Greenhouse Gas Emissions
Inventory Report and consider distinguishing ’Portfolio’ implications from
’Operational’ implications
ii)
reword the last sentence under heading “Introduction” with main objection being
the terms “maintain” and “light”
iii) include purpose of the report (i.e. to disclose findings to stakeholders); and
iv) include statement that the metrics have been produced on a ‘best endeavours
basis”.
ACT
4.5 Global Investor Statement on Climate Crisis
The Board:
a)
RECEIVED a verbal update on the paper from S9(2)(a) .
b)
CONSIDERED and
DISCUSSED whether to add its signature to the Global Investor
Statement on the Climate Crisis.
c)
NOTED that the Board has clearly defined responsibilities and letter of expectations from
the Minister with regards to climate initiatives.
INFORMATION
d)
REQUESTED that the statement be recirculated to the Board with a new covering paper
once the positions taken by GSFA and ACC are known.
5.
SCHEMES
5.1 Schemes Update
OFFICIAL
The Board:
a)
NOTED the paper and
S9(2)(i)
.
THE
b)
S9(2)(i)
c)
S9(2)(i)
UNDER
5.2 Schemes Update -Metrics
The Board
NOTED the paper and
REQUESTED that the now redundant metrics be removed
from future reports.
6.
FINANCE
RELEASED
6.1 NPF Schemes (GAT) Results to 31 May 2022
The Board
NOTED the report.
6.2 Board and Board Reserves – Financial Statements to 31 May 2022
The Board:
8
a)
NOTED the financial information for the Board of Trustees for the two months ended 31
May 2022.
b)
NOTED the financial information for the Board Reserves for the two months ended 31
May 2022.
7.
PAPERS FOR NOTING
There were no papers for noting for this period.
8.
DELEGATED DECISIONS
8.1 Use of Common Seal
ACT
The Board
NOTED the report.
8.2 Documents signed on behalf of the Board
The Board
NOTED the report.
8.3 Management decisions made under delegated authority
The Board
NOTED the report.
INFORMATION
9.
OTHER BUSINESS
The Chair noted that Stephen Ward and Daniel Mussett were retiring from the Board on 30
June 2022. The contribution that both Stephen and Daniel have made to the governance of
NPF and the sharing of their specialist legal and investment knowledge respectively over the
years is substantial and much appreciated by the Board and staff. Stephen and Daniel will be
missed and the Board wished them well in their future endeavours.
OFFICIAL
S9(2)(g)(i)
THE
There being no other business, the meeting finished at 12.30 pm.
NEXT MEETING: The next scheduled meeting of the Board will be held in Wellington
commencing at
11.00 am on Tuesday, 23 August 2022.
UNDER
RELEASED
9
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,
and Zoom video conference
Date
Tuesday, 23 August June 2022 commencing at 8.15 am
PRESENT Edward Schuck (Chair)
Louise Edwards
Graham Ansell
Sarah Park*
Tracey Berry
Lloyd Kavanagh
ACT
IN ATTENDANCE
S9(2)(a) , CE
S9(2)(a) (from item 3.1)
Sean Wakelin* (from item 3.1 to item 4.2)
Peter McCaffrey (from item 3.1 to item 3.5)
S9(2)(a) (from item 3.1 to item 4.2)
Hadyn Hunt
APOLOGIES
S9(2)(a)
Ireen Muir
S9(2)(a)
INFORMATION
* Denotes participants joined the meeting via Zoom.
Th
e Board initially met in the absence of Management.
OFFICIAL
All
Board members confirmed there were no specific interests to declare.
Th
e Chair welcomed new Board members Tracey Berry and Lloyd Kavanagh to the meeting.
THE
1.
MINUTES OF THE BOARD MEETINGS
1.1 Board Meeting Minutes
The Board
APPROVED the minutes of the Board meetings held on 28 June 2022 and by
UNDER
circulation on 12 July 2022.
1.2 Noting of the ALCO minutes
The Board:
a)
NOTED the draft minutes of the ALCO meeting held on 23 June 2022 and 20 July 2022.
b)RELEASED
NOTED and
DISCUSSED section E of the ALCO minutes that Management is still
awaiting the 31 March 2022 DBPC cash flow projection from the Actuary. S9(2)(g)(i)
c)
NOTED in the 23rd June 2022 minutes that the
S9(2)(i)
1
2.
ADMINISTRATION
2.1 Matters Arising
The Board:
a)
NOTED and
DISCUSSED the Matters Arising.
b)
DISCUSSED log# 123 Cyber Update in relation to the war in Ukraine and the battle in
the cyberworld that state actors may target institutions in New Zealand. A Cyber report
had been presented at the 28th June 2022 meeting and
REQUESTED Management
provide the date and agenda item this was presented so Board members could review in
Diligent.
ACT
c)
DISCUSSED log# 34 and the Board
AGREED the education session would be useful.
2.2 Long Term Work Plan
The Board:
a)
NOTED and
DISCUSSED the Long-Term Work Plan.
2.3 Interests Register
The Board:
INFORMATION
a)
NOTED the Interests Register.
b)
REQUESTED it be noted that
S9(2)(a)
will be coming off
S9(2)(a)
on the 31st December 2022.
OFFICIAL
3.
KEY PAPERS
3.1 Chief Executive’s Overview
THE
The Board:
a)
NOTED the report and the verbal update provided by S9(2)(a) .
b)
NOTED the joint NPF/GSF dinner will be discussed at agenda item 3.9 Board Dates.
UNDER
c)
DISCUSSED the staff training information provided and asked if the costs could be
included. Management advised a cost breakdown was provided at the AML meeting
where this information was presented. It was also mentioned that there was training
budget available for Director education.
3.2 Health, Safety and Wellness Update
The Board
NOTED and
DISCUSSED the Health and Safety Update and the dashboard.
RELEASED
3.3 FX Hedge Ratio
The Board:
a)
DISCUSSED the paper and
COMMENTED that it was excellent.
b)
NOTED the hedge ratio will be reviewed again on an annual basis.
c)
APPROVED O unit hedge ratio being maintained at 40% net (55.6% gross).
2
3.4 NZ Equities Review
Management advised the sentence in section A1 “currently, there is a 1.5% DAA tilt away from
New Zealand equities in favour of global equities.” was inserted in error and is to be
disregarded.
The Board:
a)
DISCUSSED the paper.
b)
NOTED the E Unit Fund has outperformed the S&P NZX50 Index benchmark net of fees
over all measurement periods ending 30 June 2022.
c)
NOTED Management continues to hold conviction in an active approach to the
ACT
management of New Zealand public equities.
d)
S9(2)(i)
e)
REQUESTED, for ease of comparison, NPF portfolio returns are inserted into the peer
performance survey in the future.
3.5
S9(2)(i)
INFORMATION
OFFICIAL
3.6 Climate Change TCFD Report
THE
The Board:
a)
NOTED and
DISCUSSED the paper.
b)
Management advised the Board to defer approval until this report has been shared with
UNDER
CFIs for consistency.
c)
NOTED that NPF’s climate-related disclosures were part of its commitment to the Crown
Responsible Investment Framework rather than a legal requirement whereas investment
managers and other large superannuation schemes would be bound by the XRB Act.
d)
REQUESTED Management revisit the layout and labels of graphs on the final two pages
to clarify what is being presented.
RELEASED
e)
REQUESTED Management to circulate the paper and seek approval to publish before the
next Board meeting, with the aim of publishing before the end of the year.
3.7 DBP Contributors and Aircrew Schemes – actuarial valuations, DBPC to DBPA
transfer basis and employer contribution rates
3
The Board
NOTED the verbal update provided, papers to be forwarded by circulation at a
later date.
3.8
Joining the Climate Action 100+ Initiative
The Board:
a)
DISCUSSED and
APPROVED the proposal to join the Climate Action 100+ Initiative as a
supporting investor.
b)
REQUESTED Management provide a list of all climate-related initiatives NPF has signed
up to and place on the NPF website.
ACT
3.9 Board Dates for 2023
The Board:
a)
AGREED the 21st February 2023 Board date (Zoom meeting) be amended to 14th
February 2023 (in person) meeting so a dinner can be arranged with the GSFA Board
members for that evening.
b)
DISCUSSED the 2023 dates as some days not suitable and
REQUESTED Management
obtain availability from members on the Monday/Wednesdays and Fridays surrounding
these dates. To be forwarded before the end of the week.
INFORMATION
4. INVESTMENTS
4.1 Quarterly Investment Performance Report period ended 30 June 2022
The Board:
OFFICIAL
a)
NOTED the report and received a verbal update from S9(2)(a) .
b)
DISCUSSED the DBPC and NPPS graphs in relation to the investment objective 2.5% line
THE
and
REQUESTED these be removed.
c)
REQUESTED graphs and commentary relating to scheme objectives be revised to show
current funding position versus objectives.
4.2 Investment Update
UNDER
The Board:
a)
DISCUSSED and
NOTED the report.
5.
SCHEMES
RELEASED
5.1 Schemes Update
The Board:
a)
NOTED the paper.
b)
REQUESTED Management clarify the increase in debt management over the past two
months at the next Board meeting.
4
c)
REQUESTED Management provide a brief background paper on unclaimed monies
including how it is currently managed and requirements for passing funds to IRD.
5.2 Schemes Update -Metrics
The Board:
a)
NOTED the paper.
b)
DISCUSSED the DBPC note (and corresponding graph) in that it is exclusive of future
employer and employee contributions. The Actuary has been asked to provide the
funding levels using total benefits and contributions.
d)
REQUESTED the DBPC chart is updated for the next Board meeting.
ACT
6.
FINANCE & RISK
6.1 Scheme Accounts to 30 June 2022
The Board
NOTED the report.
6.2 Board and Board Reserves – Financial Statements to 30 June 2022
INFORMATION
The Board:
a)
NOTED the financial information for the Board of Trustees for the three months ended
30 June 2022.
b)
NOTED the financial information for the Board Reserves for the three months ended 30
June 2022.
6.3 Policy Consolidation
OFFICIAL
The Board:
a)
NOTED the consolidation update.
THE
b)
REQUESTED the Procurement of Services Policy which is currently GSF only policy be a
joint NPF/GSF Policy.
6.4 Policy review UNDER
The Board:
a)
NOTED and
APPROVED the amendments to the Board Fees and Expenditure Policy
b)
REQUESTED the breakfast value be increased to $35, and that these values are reviewed
yearly due to current inflation rates.
6.5 LEGISLATIVE COMPLIANCE
RELEASED
The Board:
a)
NOTED the paper.
b)
REQUESTED Management review the applicability of the following:
• NZ Nuclear Free Zone, Disarmament, and Arms Control Act 1987,
• Cluster Munitions Prohibition Act 2009
• Anti-Personnel Mines Prohibition Act
5
• Any other applicable weapon Acts
in consultation with DLA Piper for inclusion in the Legislative Compliance manual.
7.
DELEGATED DECISIONS
7.1 Use of Common Seal
The Board
NOTED the report.
7.2 Documents signed on behalf of the Board
The Board
NOTED the report.
ACT
7.3 Management decisions made under delegated authority
The Board
NOTED the report.
8.
OTHER BUSINESS
The Board:
a)
REQUESTED external presenters be added to the Workplan (e.g. Harbour).
INFORMATION
b)
The Chair noted that this was
S9(2)(a) last Board meeting as Chief Executive due
to his resignation and thanked him for his great service and appreciated the 10-year
commitment and contribution in that period.
There being no other business, the meeting finished at 12.30 pm.
NEXT MEETING: The next scheduled meeting of the Board will be held in Wellington
OFFICIAL
commencing at
9.30 am on Wednesday, 19 October 2022.
THE
UNDER
RELEASED
6
Minutes of a
BOARD OF TRUSTEES OF THE NATIONAL PROVIDENT FUND
meeting of
(the Board)
Venue
The PwC Centre, Level 4, 10 Waterloo Quay, Wellington and Zoom video
conference
Date
Wednesday, 19 October 2022 commencing at 9.30 am
PRESENT Edward Schuck (Chair)
Louise Edwards
Graham Ansell
Sarah Park
ACT
Tracey Berry*
Lloyd Kavanagh*
Michelle Tsui
IN ATTENDANCE
Fiona Morgan, Acting CE
S9(2)(a)
Ireen Muir
Hadyn Hunt
S9(2)(a)
Sean Wakelin
S9(2)(a) * (from item 3)
INFORMATION
Guests:
Christine Ormrod and S9(2)(a) , PWC, for item 3.1
APOLOGIES
Nil
* Denotes participants joined the meeting via Zoom.
OFFICIAL
THE
All
Board members confirmed there were no specific interests to declare.
1.
MINUTES OF THE BOARD MEETINGS
UNDER
1.1 Board Meeting Minutes
Th
e Board:
a)
APPROVED the minutes of the Board meetings held on 23 August 2022 and by
circulation on 29 September 2022.
b)
APPROVED the minutes of the Investment Committee meeting held on 3 May 2022, as
the Investment Committee agreed that the minutes of its meeting held on 3 May 2022
be approved by the Board as only one original Committee member was present at the
RELEASED
5 October meeting.
1.2 Noting of the ALCO minutes
The Board
NOTED the minutes of the ALCO meetings held on 22 August 2022 and 20
September 2022 and that paragraph 1(e.) of the ALCO minutes for meeting held on 22 August
would be amended to note the DBPC funding level has been re-estimated on a “Past Service
Liability basis”.
1
1.3 Noting of the Investment Committee minutes
The Board
NOTED the draft minutes of the Investment Committee meeting held on 5 October
2022.
2.
ADMINISTRATION
2.1 Interests Register
The Board:
a)
NOTED the Interests Register.
2.2 Matters Arising
ACT
The Board:
a)
NOTED and
DISCUSSED the Matters Arising.
b)
DISCUSSED log #123,
RECEIVED verbal update from Management that the new IT
provider for Annuitas Management Limited (AML) would be able to provide phishing email
service and
REQUESTED an update be provided to the Board once the transition to the
new provider has been completed.
c)
S9(2)(i)
INFORMATION
2.3 Long Term Work Plan
The Board:
OFFICIAL
a)
NOTED and
DISCUSSED the Long-Term Work Plan.
b)
REQUESTED Management prepare a separate schedule for investment managers to
THE
attend Board meetings, whilst
NOTING that a clear brief on purpose of attendance would
need to be provided to investment managers and that investment managers can be called
to a Board meeting outside of the schedule if there is an issue that needs addressing.
2.4 Chief Executive’s Report
UNDER
The Board:
a)
NOTED the report.
b)
RECEIVED a verbal update from
S9(2)(a)
, Acting CE, including the IT service
provider transition, office renovation and staff movements, including
S9(2)(a)
resignation.
c)
NOTED the breadth of experience and knowledge that S9(2)(a) has brought to the
organisation and
RELEASED
RECEIVED verbal confirmation from S9(2)(a) that given S9(2)(a)
resignation, processes are in place to ensure that any time critical matters can be
attended to by the investment team.
d)
NOTED and
DISCUSSED the Health and Safety Update and dashboard included the
report.
2
3.
KEY PAPERS
Christine Ormrod (Actuary) and S9(2)(a)
from PWC joined the meeting.
3.1
Schemes- DBPC DBPA and Aircrew Schemes - transfer basis and reviews
3.1.1 Basis for determining the transfer of assets between the DBP Contributors
Scheme and the DBP Annuitants Scheme.
The Board:
a)
NOTED the Actuary’s report on the basis for determining the transfer of assets between
the DBP Contributors Scheme and the DBP Annuitants Scheme.
b)
RECEIVED a presentation from Christine Ormrod and
DISCUSSED her report.
ACT
c)
RECEIVED verbal confirmation from Christine Ormrod that:
(i) calculations are sensitive to inflation, with the first inflation increase applying from
March 2024;
(ii) assumptions are based on the Board’s investment return and long term inflation
expectations, with regard given to quarterly market expectations published by
market commentators including the NZ Institute of Economic Research; and
(iii)
S9(2)(g)(i)
INFORMATION
d)
DISCUSSED the information provided to members and received confirmation from
Management that while financial advice is not given to members, nor paid for, members
are recommended to seek financial advice and a link to a list of financial advisers is
provided.
e)
Based on the recommendations of the Actuary,
RESOLVED to:
OFFICIAL
(i)
ADOPT the 2022/2023 transfer basis, set out in the Actuary’s report, and the
transfer factors, calculated using the transfer basis as set out in Appendix A of the
report, with effect on or before 1 November 2022, for the purposes of clause F9 of
THE
the trust deed of the DBP Contributors Scheme and clause 8 of the trust deed of the
DBP Annuitants Scheme; and
(ii) continue to
REVIEW the transfer basis on an annual basis.
f)
NOTED the notional asset allocation will be reviewed prior to the 2024/2025 transfer
factors being determined unless there is a significant change in the economic
UNDER
assumptions or the nature of the liabilities, in which case it should be reviewed earlier.
3.1.2 DBP Contributors Scheme – Actuarial Review
The Board:
a)
NOTED the report on the actuarial review for the DBP Contributors Scheme, as at 31
March 2022.
RELEASED
b)
RECEIVED a presentation from Christine Ormrod and
DISCUSSED her report.
c)
RESOLVED to
ACCEPT the Actuary’s recommendations that:
(i) employer contributions to the DBP Contributors Scheme be retained at four times
employee contributions as recommended in the actuarial review as at 31 March
2022 for the period 1 April 2023 to 31 March 2024 inclusive of ESCT; and
(ii) the Board does not amend the trust deed to increase the benefits payable from the
DBP Contributors Scheme.
d)
NOTED the Actuary’s recommendations that:
3
(i) the next actuarial review of the DBP Contributors Scheme be carried out as at 31
March 2023 to review the employer contribution rate recommendation, with the
next statutory actuarial examination as at 31 March 2024;
(ii) the Board continue to periodically review the asset allocation to ensure it remains
appropriate; and
(iii) the Board continue to explore new ways to contact non-active contributors to the
Scheme over age 70 and encourage them to elect a benefit payment.
e)
REQUESTED Management send more direct correspondence to inactive contributors to
the Scheme and encourage them to elect a benefit payment.
3.1.3 Aircrew Superannuation Scheme – Actuarial Review
The Board:
ACT
a)
NOTED the actuarial review for the Aircrew Superannuation Scheme at 31 March 2022.
b)
RECEIVED a presentation from Christine Ormrod and
DISCUSSED her report.
c)
RESOLVED to
ACCEPT the Actuary’s recommendations that:
(i) the employer contribution rate for the Aircrew Superannuation Scheme be retained
at 3.9 times contributors’ contributions from 1 April 2023 inclusive of ESCT; and
(ii) the Board does not amend the trust deed to increase the benefits payable from the
Aircrew Superannuation Scheme.
d)
NOTED:
INFORMATION
(i) the next actuarial review of the Aircrew Superannuation Scheme is carried out as at
31 March 2023; and
(ii) the Board continues to periodically review the investment strategy of the Aircrew
Superannuation Scheme to ensure it remains appropriate.
e)
REQUESTED Management engage with Air New Zealand as the employer to discuss the
OFFICIAL
impact of investment returns on the Scheme’s financial position and the future funding
of the Scheme (eg lump sum contributions or potential increases in the employer
contribution rate).
THE
Christine Ormrod (Actuary) and S9(2)(a)
from PWC left the meeting.
3.2 NPF Projections
The Board:
UNDER
a)
RECEIVED a verbal update from Management and
DISCUSSED the paper.
b)
NOTED the comprehensive modelling completed by
S9(2)(a) and whilst appreciating
the information provided at an aggregate level
REQUESTED a paper be provided for the
December Board meeting detailing the projections and assumptions on a scheme by
scheme basis and potential triggers for action for the schemes.
3.3 Annuitas Annual Report Resolutions
RELEASED
The Board:
a)
CONFIRMED Dr Ed Schuck and Ms Sarah Park as the Board’s representatives at the
Annual General Meeting of Annuitas to be held in late October/early November.
b)
APPROVED an Annuitas shareholder’s resolution on behalf of the Board under section
122 of the Companies Act 1993 that:
(i) In respect of the Company’s annual report for the year ended 30 June 2022 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
4
employees and their remuneration, the value of which exceeds $100,000 to be
included in the annual report.
3.4 Liquidity Policy Review
The Board:
a)
NOTED and
DISCUSSED the paper.
b)
RECEIVED a verbal update from S9(2)(a) , including confirmation that liquidity is a
primary consideration and impact on liquidity is considered with any change to asset
allocation or redemption notice period.
c)
NOTED that Russell Investments consider the liquidity policy fit for purpose.
d)
NOTED the Fund is very liquid.
ACT
3.5 SIPSP Compliance
The Board:
a)
NOTED the amount of work and high level of information reviewed to test compliance.
b)
NOTED that Russell Investments found no instances of non-compliance with the SIPSP.
c)
APPROVED that the SIPSP is changed:
(i) Investment Objectives, Policies, point 8, on page 12 is changed from “quarterly” to
“annual” comparison of manager results with peers; and
INFORMATION
(ii) page 6 is changed to “In exercising its discretion the Board has regard to the advice
from the Actuary”.
3.6 Global Equities Review
The Board:
a)
OFFICIAL
NOTED and
DISCUSSED the paper.
b)
NOTED the global equities portfolio has met its excess return and risk-adjusted return
expectations over all measurement periods.
THE
c)
S9(2)(i)
d)
S9(2)(i)
UNDER
e)
S9(2)(i)
.
f)
RECEIVED a verbal update from S9(2)(a) that a paper will be provided to the Board’s
RELEASED
Investment Committee in the near future relating to a proposed change to a low carbon
index.
4. INVESTMENTS
4.1 Investment Update
5
The Board:
a)
DISCUSSED and
NOTED the Investment Update.
b)
APPROVED the affixing of the common seal to the Power of Attorney document required
by Goal, the class action provider, subject to satisfactory sign off from DLA Piper.
4.2 Quarterly Investment Performance Report period ended 30 June 2022
The Board:
a)
NOTED the report and received a verbal update from S9(2)(a) .
b)
NOTED the changes made to the report to show schemes’ current funding position versus
objectives, as requested by the Board.
c)
NOTED the de-risked strategy for NPPS was performing well.
ACT
4.3 Responsible Investment Update
The Board:
a)
DISCUSSED and
NOTED the paper covering the Fund’s Responsible Investment
developments.
b)
COMMENTED that CFI RI Framework includes three pillars: measure, reduce, and
influence and, while NPF’s draft climate disclosure report addresses these pillars, it could
INFORMATION
incorporate some of the commentary from this paper to show how we influence the
transition to a low carbon economy.
c)
NOTED that
S9(2)(a)
would discuss outside of the meeting how short
positions within Arrowstreet are considered as part of responsible investing.
OFFICIAL
5.
SCHEMES
5.1 Schemes Update
THE
The Board:
a)
DISCUSSED and
NOTED the paper.
b)
RECEIVED verbal update from
S9(2)(a)
that Management has regular engagement
with Datacom, Datacom staff have been working offsite, that any comment from
UNDER
members would be reported back to Management as a compliment or complaint, and
additional oversight is provided through submissions and memos. Most correspondence
of late has been about NPF calendars and in response to the Chair’s letter. Additional
analysis on ELR members will be provided in Feb 2023.
c)
REQUESTED Management provide confirmation on where the timing requirement for
converting UAD members to ELR originates from.
RELEASED
5.2 Schemes Update -Metrics
The Board:
a)
DISCUSSED and
NOTED the paper.
b)
NOTED Management will discuss the Financial Management Policy for DBP Contributors
Scheme further with the Board Chair and prepare papers for consideration at the
December 2022 Board meeting on:
(i) the triggers and asset allocation for the DBP Contributors Scheme as outlined in the
Financial Management Policy; and
6
(ii) the asset allocation for the Aircrew Scheme.
c)
NOTED the Audit and Risk Review Committee has requested an incident report be
provided on the NPPS metrics reporting error referred to in the paper.
6.
FINANCE & RISK
6.1 Scheme Accounts to 31 August 2022
The Board:
a)
NOTED the report incorporating the Scheme Financial Statements for the five months to
31 August 2022.
b)
S9(2)(i)
ACT
6.2 Board and Board Reserves – Financial Statements to 30 September 2022
The Board:
a)
NOTED the financial information for the Board of Trustees for the six months ended 30
September 2022.
b)
NOTED the financial information for the Board Reserves for the six months ended 30
INFORMATION
September 2022.
7.
DELEGATED DECISIONS
7.1 Use of Common Seal
The Board
NOTED the report.
OFFICIAL
7.2 Documents signed on behalf of the Board
The Board
NOTED the report.
THE
7.3 Management decisions made under delegated authority
The Board
NOTED the report.
UNDER
8.
OTHER BUSINESS
There being no other business, the meeting finished at 12.50 pm.
NEXT MEETING: The next scheduled meeting of the Board will be held in Wellington
commencing at
9.30 am on Thursday, 8 December 2022.
RELEASED
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 and Zoom
video conference
Date
Thursday, 8 December 2022 commencing at 9.30 am
PRESENT Edward Schuck (Chair) *
Louise Edwards*
Graham Ansell*
Sarah Park*
ACT
Tracey Berry
Lloyd Kavanagh*
Michel e Tsui*
IN ATTENDANCE
Fiona Morgan, Acting CE
S9(2)(a)
Hadyn Hunt
S9(2)(a)
Ireen Muir
Peter McCaffrey (from item 3)
Sean Wakelin (from item 3)
INFORMATION
S9(2)(a)
(from item 3)
S9(2)(a) * (from item 3)
APOLOGIES
Nil
* Denotes participants joined the meeting via Zoom.
OFFICIAL
All
Board members confirmed there were no specific interests to declare.
THE
1. MINUTES OF THE BOARD MEETINGS
1
.1 Board Meeting Minutes
Th
e Board
APPROVED the minutes o
UNDER f the Board meeting held on 19 October 2022.
1
.2 Noting of the ALCO Minutes
The Board
NOTED the minutes of the ALCO meetings held on 18 October 2022 and 15
November 2022.
1.3 Noting of Board Committee Minutes
RELEASED
The Board:
a)
NOTED the draft minutes of the Audit and Risk Review Committee meeting held on 19
October 2022.
b)
NOTED the draft minutes of the Investment Committee meeting held on 24 November
2022 and that comments made on the draft by the Chair were yet to be incorporated.
1
2.
ADMINISTRATION
2.1 Interests Register
The Board
NOTED the Interests Register and there were no new items for recording.
2.2 Matters Arising
The Board
NOTED and
DISCUSSED the Matters Arising.
2.3 Long Term Work Plan
The Board:
b)
NOTED and
DISCUSSED the Long Term Work Plan.
ACT
c)
NOTED the Investment Consultant review is now planned for March 2023 and the
Strategic Asset Allocations spread out through the year.
d)
RECEIVED an update from the Chair that the Letter of Expectations from the Minister of
Finance has been received and
REQUESTED Management circulate the Letter of
Expectations to al Board members and draft a response for review and approval at the
February 2023 Board meeting.
e)
CONFIRMED representatives of Treasury wil be invited to attend the February 2023
Board Meeting and
NOTED Management provide monthly updates to Treasury on the
potential value of the claim, if any, on the Crown in the current financial year under
INFORMATION
section 72 for the Pension National, Lump Sum National and Meat Industry Schemes.
f)
CONFIRMED that a summary of the schemes’ expense projections once approved by the
Board may be shared with Treasury.
2.4 Chief Executive’s Report
The Board:
OFFICIAL
a)
NOTED the report.
b)
RECEIVED a verbal update from
S9(2)(a) , Acting CE regarding the IT service
THE
provider transition, office renovation, corporate projects and
S9(2)(g)(i)
c)
S9(2)(g)(i)
UNDER
d)
DISCUSSED the appointment and start date of the new CE,
RECEIVED confirmation
from Management that an induction plan has been prepared and
REQUESTED the
agenda for the first Board Meeting in February 2023 include Board only time (as a
working lunch) with the new CE.
e)
NOTED the corporate projects outlined in the report represent a lot of work and they are
beneficial for the organisation.
RELEASED
f)
DISCUSSED the Health and Safety Update and dashboard included the report.
2
3.
KEY PAPERS
3.1 DBP Contributors Scheme (DBPC) and Aircrew Superannuation Scheme
Strategic Asset Allocation (SAA) Reviews
The Board:
DBPC
a)
NOTED the initial paper was presented at the Investment Committee meeting and the
revised paper prepared for the Board addressed the discussions and questions from the
Investment Committee.
ACT
b)
DISCUSSED: (i) the triggers in the DBPC Financial Management Policy, and that the triggers for de-
risking the investment portfolio provide a mechanism for Management to act without
having to revert to the Board, but the triggers for increasing risk require Management
to review the SAA and make recommendations to the Board; and
(ii) the levers available to influence the financial position at end of life for the DBPC and,
that, given the changes are made annually on recommendation from the Actuary and
approval from the Minister of finance, the earliest any change to employer
INFORMATION
contribution rates can be made once the financial statements for financial year ending
31 March 2023 are finalised, with the change effective from 1 April 2024.
c)
DISCUSSED the timing delay in SAA review, recommendations to the Board and
implementation, and
RECEIVED confirmation from Management that in future these can
be addressed by circulation and implemented out of cycle.
d)
RECEIVED confirmation from Management:
OFFICIAL
(i) full value of members opting for a pension is factored into the funding level, with
members opting for a transfer value taking a share of any surplus or deficit.
(ii) that Annuitas assumptions adopte
THE d by the Actuary for valuation purposes have a
relatively low sensitivity to inflation and also that a higher near-term inflation rate is
factored in the cashflows with lower long-term rates thereafter.
e)
ACKNOWLEDGED the conservative nature of the cash flow forecast
S9(2)(i)
UNDER
f)
NOTED the DBPC funding level based on past service liabilities as of 31 October 2022
was estimated to be S9(2)(i) which is below the SAA review level of 98%.
g)
APPROVED the fol owing change in DBPC SAA from 1 Feb 2023:
RELEASED
Unit (Note 1)
Current
New
SAA
SAA
C Unit
56%
49%
F2 Unit
24%
21%
E Unit
5%
6%
O Unit
15%
24%
(Note 1) DBPC’s allocation between C and F2 Unit is not fixed and can be changed
so that the duration remains within ½ year of the duration of the liabilities.
3
h)
NOTED increasing the equity allocation for DBPC from 20% to 30%
S9(2)(i)
i)
NOTED the Board will next review the employer contribution rate for the DBPC effective
from 1 April 2024 in around October 2023.
j)
NOTED DBPC’S SAA wil be reviewed again in August 2023 based on the 31 March 2023
financial statements, updated cashflows and the latest capital market assumptions unless
there is a significant change to the funding level in the interim and subject to the
Scheme’s financial management policy.
Aircrew Scheme
k)
NOTED Aircrew Scheme’s funding level based on TA/TB as at 31 October 2022 was
estimated to be S9(2)(i) which is below the SAA review level of 97%.
ACT
l)
NOTED with the current asset al ocation of 40% equities, the Aircrew Scheme’s TA/TB
ratio is projected be
S9(2)(i)
.
m)
APPROVED no change to Aircrew Scheme’s current SAA.
Unit Allocation
SAA
F Unit
60%
E Unit
8%
INFORMATION
O Unit
32%
n)
NOTED Aircrew Scheme’s SAA wil be reviewed again in August 2023 using the 31 March
2023 financial statements, updated cashflows and the latest capital market assumptions.
3.2 NPF Schemes Projections
OFFICIAL
The Board:
a)
RECEIVED a verbal update from Management that the projections would be updated
annual y and added to the Work Plan. The paper wil also be added to the induction pack
THE
as it provides a good summary for each scheme.
b)
DISCUSSED and
NOTED the paper.
c)
S9(2)(i)
.
d)
COMPLIMENTED the team on the paper.
UNDER
3.3 Investment Manager Presentation Schedule
The Board
NOTED the indicative schedule, and that Management will seek feedback from the
Board on areas of focus for each presenting investment manager closer to the time of
presentation with the expectation that presentations, plus Q&A will generally be allotted no
more than one hour.
3.3 Low Carbon Equities Benchmark
RELEASED
The Board:
a)
DISCUSSED the paper and
APPROVED a change in the global equity index benchmark
from MSCI All Country World Index (MSCI ACWI) to the MSCI Low Carbon Target Index
for the O Unit Fund with effect from 1 January 2023.
b)
NOTED the Low Carbon Target index has a carbon intensity about 30% of MSCI ACWI
and an expected tracking error of 0.4% pa.
4
ACT
INFORMATION
OFFICIAL
THE
UNDER
RELEASED
ACT
INFORMATION
OFFICIAL
THE
UNDER
RELEASED
7.3 Management decisions made under delegated authority
The Board
NOTED the report.
8.
OTHER BUSINESS
a) The Board
THANKED S9(2)(a) for his responsiveness to Board requests and for being
proactive and helpful. Board members expressed their thanks for the intellect, opinions and
ideas that he brought to the organisation and wished him wel on his future endeavours.
b) There being no other business, the meeting finished at 12.45 pm.
NEXT MEETING: The next scheduled meeting of the Board will be held in Wellington
Tuesday,
14 February 2022 (time to be confirmed).
ACT
INFORMATION
OFFICIAL
THE
UNDER
RELEASED
7
