“custodian means a person appointed under section 19A(1) to act as custodian of the Fund, or any part of the Fund

“Government Superannuation Fund Authority or Authority means the entity established under section 15A

“Government Superannuation Fund Authority board or board means the board of that entity as referred to in section 15G

“invest means to carry on any activity, do any act, or enter into any transaction that the Authority considers to be for the purpose, directly or indirectly, of—

• “(a) enhancing or protecting the value of the Fund:

• “(b) managing, or enabling the management of, the Fund

“liabilities means liabilities, debts, charges, duties, and obligations of every description (whether present or future, actual or contingent, and whether payable or to be observed or performed in New Zealand or elsewhere)

“property means property of every kind, whether tangible or intangible, real or personal, corporeal or incorporeal; and includes, without limitation,—

• “(a) choses in action and money:

• “(b) goodwill:

• “(c) rights, interests, and claims of every kind in or to property, whether arising from, accruing under, created or evidenced by, or the subject of, an instrument or otherwise, and whether liquidated or unliquidated, actual, contingent, or prospective

“rights means all rights, powers, privileges, and immunities, whether actual, contingent, or prospective

“subsidiary has the same meaning as in sections 5 to 8 of the Companies Act 1993

“Superintendent means the Superintendent as referred to in section 2C before the date on which the Government Superannuation Fund Amendment Act 2001 receives the Royal assent”.

“salary—

• “(a) means the salary and wages paid regularly in return for services:

• “(b) does not include bonus payments, payments for overtime, allowances paid for special work performed, the reimbursement of expenses, lump sum payments in lieu of notice, retiring gratuities, redundancy payments, and contributions paid for or in respect of employer contributions:

• “(c) may include a period of paid leave, but only if it is paid before the contributor ceases Government service.”.

“12 Matters to be taken into account on appeal

• “(1) The Appeals Board must—

  • “(a) act in accordance with the statement of policies, unless the Appeals Board considers that it is inappropriate to do so in the particular circumstances of a case; and

  • “(b) take into account the interests of any person who has an interest in the matter that is the subject of the appeal (including, without limitation, the interests of the Crown and of any contributor, beneficiary, or controlling authority affected by the matter), to the extent that those interests are known to the Appeals Board.

  “(2) In this section, statement of policies means the statement published by the Superintendent under section 19F in December 1999 (as that statement may have been, or may be, changed under section 19F(2), whether before or after the substitution of that section by the Government Superannuation Fund Amendment Act 2001).”

“14 Money payable into Fund

• The following must from time to time be paid into the Fund:

  • “(a) the contributions from contributors as provided in this Act:

  • “(b) the amounts payable into the Fund under section 95:

  • “(c) money accruing from the investment of the Fund:

  • “(d) any other money that may be lawfully payable into the Fund.

  “Compare: 1956 No 47 s 14

“15 Money payable out of Fund

• The following must from time to time be paid out of the Fund:

  • “(a) the benefits arising under this Act:

  • “(b) any other money that may be lawfully payable out of the Fund.

  “Compare: 1956 No 47 s 15

“Government Superannuation Fund Authority

“15A Establishment of Government Superannuation Fund Authority

• “(1) This section establishes the Government Superannuation Fund Authority (the Authority).

  “(2) The Authority is a Crown entity for the purposes of the Public Finance Act 1989.

“15B Body corporate status and powers

• “(1) The Authority is a body corporate with perpetual succession.

  “(2) The Authority has—

  • “(a) full capacity to carry on or undertake any activity or business, do any act, or enter into any transaction; and

  • “(b) for the purposes of paragraph (a), full rights, powers, and privileges.

  “(3) The Authority may exercise its powers only for the purpose of carrying out its functions.

  “(4) There are no restrictions on the Authority's investment powers, other than as provided by sections 15J, 15K, and 15O.

  “(5) The Authority may not subscribe for, acquire, or hold any shares or other securities issued by a company unless—

  • “(a) the company is a subsidiary of the Authority; or

  • “(b) the shares or other securities are an investment of the Fund; or

  • “(c) subsection (6) applies to the company.

  “(6) The Authority may subscribe for, acquire, or hold any shares or other securities issued by a company if—

  • “(a) the company provides (or is to provide or has provided) to the Authority any services of a kind referred to in section 19(1)(a) to (c) (whether or not the company also provides services to other persons); and

  • “(b) every shareholder of the company is a company or other body corporate; and

  • “(c) the Crown controls the composition of a majority of the governing body of every shareholder.

  “(7) This section is subject to section 15C (borrowing).

  “Compare: 1993 No 105 s 16(1)

“15C Borrowing

• “(1) The Authority may not, except with the approval of the Minister of Finance,—

  • “(a) borrow money (neither on behalf of the Authority nor in respect of the Fund); nor

  • “(b) mortgage or charge any of the real or personal property of the Fund, whether present or future, as security; nor

  • “(c) hold any financial instrument that places or may place a liability or a contingent liability on the Authority, the Fund, or the Crown.

  “(2) The Minister's approval may be given for any class of transactions in subsection (1)(a) to (c).

“15D Functions

• “(1) The functions of the Authority are to manage and administer the Fund and the schemes in accordance with this Act.

  “(2) The Authority is not a trustee, or a constructive trustee, in relation to the exercise of its functions or to any other matter (except as otherwise provided in section HJ 1 of the Income Tax Act 1994 for tax purposes).

  “(3) The functions of the Authority include, if the Minister so directs, the provision of services in respect of any fund or superannuation scheme that is—

  • “(a) managed by the Crown or a Crown entity or an entity whose board is appointed by the Crown; and

  • “(b) approved by the Minister for that purpose.

  “(4) Those services may be provided on any terms and conditions that the Authority's board thinks fit, but must not place or have the potential to place a liability or a contingent liability on the Fund.

“15E Funding of administrative expenses of Authority

• “(1) The expenses of the Authority relating to the management and administration of the Fund and the schemes—

  • “(a) are to be paid out of the Fund; and

  • “(b) are to be recovered under section 95 in accordance with this section.

  “(2) The portion of the expenses attributable to all persons who are currently contributing to the Fund is to be recovered, each financial year, out of the money from which the salaries of those contributors are paid.

  “(3) The portion of the expenses attributable to all persons who are currently contributing to the Fund includes estimates of all future expenses attributable to those contributors once they cease to be contributors.

  “(4) The portion of the expenses attributable to any other person is to be recovered, each financial year, from the Crown.

  “(5) Section 95 applies as if references in that section to benefits included expenses, with any other necessary modifications.

  “(6) The Authority may determine the basis on which expenses are apportioned under that section, but the determination has no effect unless the Government Actuary certifies that the apportionment is fair and equitable.

  “(7) In this section, expenses includes—

  • “(a) any fees payable under section 19 or section 19A; and

  • “(b) all remuneration and expenses of board members and employees of the Authority; and

  • “(c) any other expenses incurred by or on behalf of the Authority.

“15F Auditor-General to be auditor of Authority

• The Authority is a public entity as defined in section 4 of the Public Audit Act 2001 and, in accordance with that Act, the Auditor-General is the auditor of the Authority and any subsidiary of the Authority.

“Board of Authority

“15G Role of board of Authority

• “(1) All decisions relating to the business of the Authority are to be made by or under the authority of a board called the Government Superannuation Fund Authority board (the board).

  “(2) The board has all the powers necessary for managing, and for directing or supervising the management of, the business of the Authority.

“15H Membership of board

• The board must consist of at least 4, but not more than 7, board members appointed by the Minister.

“15I Further provisions applying to board

• “(1) Schedule 4 applies to the board and its members.

  “(2) The Governor-General may, by Order in Council, amend any provision of clauses 13 to 53 of Schedule 4.

“Investment of Fund

“15J Investment of Fund

• “(1) The Authority is responsible for investing the Fund.

  “(2) The Authority must invest the Fund on a prudent, commercial basis and, in doing so, must manage and administer the Fund in a manner consistent with—

  • “(a) best-practice portfolio management; and

  • “(b) maximising return without undue risk to the Fund as a whole; and

  • “(c) avoiding prejudice to New Zealand's reputation as a responsible member of the world community.

“15K No controlling interests

• “(1) The Authority must use its best endeavours to ensure that the Fund does not control any other entity or hold a percentage of the voting rights in any other entity that would require it to seek control of that entity.

  “(2) If a contravention of subsection (1) arises (through inadvertence or otherwise), the Authority must take all reasonable steps to remedy the default as soon as practicable.

  “(3) For the purposes of this Act, an entity is controlled by the Fund if—

  • “(a) the entity is a subsidiary of the Fund; or

  • “(b) the Fund controls the entity within the meaning of any relevant approved financial reporting standard (within the meaning of section 2(1) of the Financial Reporting Act 1993); or

  • “(c) the Fund can control directly or indirectly the composition of the board of the entity within the meaning of sections 7 and 8 of the Companies Act 1993 (which, for the purposes of this paragraph, are to be read with all necessary modifications).

  “(4) This section limits section 15B(5)(b), but does not limit section 15B(5)(a) or (c).

  “(5) In this section, Fund means the Authority acting in respect of the Fund.

“15L Establishment of investment policies, standards, and procedures

• “(1) The Authority must establish, and adhere to, investment policies, standards, and procedures for the Fund that are consistent with its duty to invest the Fund on a prudent, commercial basis, in accordance with section 15J.

  “(2) The Authority must review those investment policies, standards, and procedures for the Fund at least annually.

“15M Contents of statements of investment policies, standards, and procedures

• A statement of investment policies, standards, and procedures must cover (but is not limited to)—

  • “(a) the classes of investments in which the Fund is to be invested and the selection criteria for investments within those classes; and

  • “(b) the determination of benchmarks or standards against which the performance of the Fund as a whole, classes of investment, and individual investments will be assessed; and

  • “(c) standards for reporting the investment performance of the Fund; and

  • “(d) ethical investment, including policies, standards, or procedures for avoiding prejudice to New Zealand's reputation as a responsible member of the world community; and

  • “(e) the balance between risk and return in the overall Fund portfolio; and

  • “(f) the Fund management structure; and

  • “(g) the use of options, futures, and other derivative financial instruments; and

  • “(h) the management of credit, liquidity, operational, currency, market, and other financial risks; and

  • “(i) the retention, exercise, or delegation of voting rights acquired through investments; and

  • “(j) the method of, and basis for, valuation of investments that are not regularly traded at a public exchange; and

  • “(k) prohibited or restricted investments or any investment constraints or limits.

“15N Statement of intent

• The statement of intent of the Authority prepared each financial year under Part V of the Public Finance Act 1989 must include (in addition to any other requirements)—

  • “(a) a statement of the board's expectations about the performance of the Fund over the next financial year, in sufficient detail to enable meaningful assessment against those expectations after the end of that financial year; and

  • “(b) a statement of the key risks to the performance of the Fund over the coming year and the actions being taken by the board to manage those risks; and

  • “(c) forecast financial statements of the Fund for the next financial year, including a statement of accounting policies.

“15O Ministerial directions relating to investment of Fund

• “(1) The Minister may, after consultation with the Authority, direct the Authority, in investing the Fund,—

  • “(a) to meet the Government's expectations as to the Fund's performance, including the Government's expectations as to risk and return:

  • “(b) not to invest in a specified investment or class of investments to which the Crown already has a direct or indirect exposure, for the purpose of limiting that exposure.

  “(2) The Minister must not give a direction that is inconsistent with the Authority's duty to invest the Fund on a prudent, commercial basis, consistent with best-practice portfolio management.

  “(3) The Authority must notify the Minister how it proposes to give effect to any direction.

  “(4) The Minister must present to the House of Representatives a copy of any direction, as soon as practicable after it is given to the Authority.

“Further provisions relating to Fund

“16 Reporting by Authority on Fund

• “(1) The Authority must report to the Minister on the Fund at those intervals that the Minister may require.

  “(2) The Authority's report must include any information that the Minister may require.

“17 Property to be held for paying benefits

• “(1) All property comprising the Fund must be held for the purpose of paying the benefits that are payable under this Act.

  “(2) This section does not prevent the Authority from making a payment out of the Fund for the purpose of carrying out its functions.

“18 Interest on money held in error

• “(1) This section applies if the Authority pays interest, out of the Fund, on any money held in error in the Fund.

  “(2) The interest must be at a rate calculated using a method that has been determined by the Authority, approved by the Minister, and published in the Gazette.

“Administration managers, investment managers, other service providers, and custodians

“19 Administration and investment management and other service providers

• “(1) The Authority may appoint, on any terms and conditions that the Authority thinks fit, 1 or more persons (including any department) to undertake each of the following functions:

  • “(a) the administration of the schemes:

  • “(b) the investment of any part of the Fund:

  • “(c) the provision of secretariat or other services to the Authority.

  “(2) Different persons may be appointed in respect of different schemes or different parts of the Fund.

  “(3) The Authority must specify, in each instrument of appointment, the powers and rights of the person appointed (including, without limitation, the extent of that person's power to delegate any of those powers and rights).

  “(4) This section does not limit section 15B.

“19A Custodianship of Fund

• “(1) The Authority may appoint a person or persons (including any department) to act as custodian of the Fund, or any part of the Fund.

  “(2) A custodian so appointed must hold the property of the Fund, or that part of the property of the Fund in respect of which they have been appointed, in their name or, if the Authority authorises it, in the name of 1 or more nominees.

  “(3) An appointment may be on any terms and conditions that the Authority thinks fit.

  “(4) The Authority must specify, in each instrument of appointment, the powers and rights of the person or persons appointed (including, without limitation, the extent of that person's powers to delegate any of those powers and rights).

  “(5) This section does not limit section 15B.

“Performance reviews

“19B Performance reviews

• “(1) From time to time, there must be conducted a review of how effectively and efficiently the Authority is performing its functions under section 15D.

  “(2) The first performance review must be conducted no later than 5 years after the operative date.

  “(3) Subsequent performance reviews must be conducted at intervals that are no more than 5 years apart (to be set by the Minister).

  “(4) The Minister must set the terms of reference for the review, which must include (without limitation) requirements that the reviewer form an opinion about—

  • “(a) whether or not the investment policies, standards, and procedures established by the Authority are appropriate to the Fund; and

  • “(b) whether or not the investment policies, standards, and procedures established by the Authority have been complied with in all material respects; and

  • “(c) the investment performance of the Fund.

  “(5) Every performance review must be conducted by an independent person appointed by the Minister.

  “(6) Every person who conducts a performance review must, as soon as practicable after conducting it,—

  • “(a) prepare a written report on the conclusions reached and recommendations formulated as a result of conducting it; and

  • “(b) give copies of the report to the Minister and the Authority.

  “(7) The Minister must present a copy of the report to the House of Representatives as soon as practicable after receiving it.

  “(8) The costs of conducting a performance review must be met out of money appropriated by Parliament for the purpose.”.

“Provisions relating to schemes”.

“19F Statement of policies and exercise of discretionary powers

• “(1) The Authority must, when exercising its discretionary powers in relation to the schemes,—

  • “(a) act in accordance with the statement of policies, unless the Authority considers that it is inappropriate to do so in the particular circumstances of a case; and

  • “(b) take into account the interests of any person who has an interest in the matter (including, without limitation, the interests of the Crown and of any contributor, beneficiary, or controlling authority affected by the matter), to the extent that those interests are known to the Authority.

  “(2) If the Authority proposes to make any change to the published statement of policies, it must—

  • “(a) consult with organisations that, in the Authority's view, have or are likely to have, or are representative of persons who have or are likely to have, an interest in the proposed change; and

  • “(b) republish the statement of policies, or the part of the statement of policies affected by the change, in whatever manner the Authority considers appropriate; and

  • “(c) send a copy of the republished statement of policies to the Appeals Board.

  “(3) In this section, statement of policies means the statement published by the Superintendent under this section in December 1999 (as that statement may have been, or may be, changed under subsection (2), whether before or after the substitution of this section by the Government Superannuation Fund Amendment Act 2001)”.

• “(4) The contributor ceases to be a contributor to the Fund on the expiration of the day on which the notice is received by the Authority and, if the contributor elected to take a refund, that refund must be paid pursuant to the election as soon as practicable after that.”

• “(5A) Subsection (5) is subject, in the case of persons to whom section 30 (variable percentage scheme) applies, to section 30(5) and (6) and section 61P.”.

• “(4) A contributor who is entitled under section 61I(4) to receive a retiring allowance may elect to increase the amount of that retiring allowance to the amount that would have been payable if the contributor had retired at an age stated in the election and not exceeding 65 years subject to—

  • “(a) the contributor making the election before attaining the age of 60; and

  • “(b) the contributor complying with any terms and conditions set by the Authority, including making any payments into the Fund that the Authority thinks fit to impose for the purpose of funding the increased benefit which will result from the election; and

  • “(c) the maximum amount of the retiring allowance being the amount calculated under subsection (1) as if the contributor had retired at the age stated in the election.”

• “(4) The contributor ceases to be a contributor to the Fund on the expiration of the day on which the notice is received by the Authority and, if the contributor elected to take a refund, that refund must be paid pursuant to the election as soon as practicable after that.”

“89B Other contributions

• “(1) This section applies if a contributor has been required (whether before or after the commencement of this section) to pay any sum into the Fund that is other than the standard rate of contribution in respect of the scheme to which the contributor belongs (whether in respect of any period that is included in a period of contributory service, or in respect of contributions not duly paid by deduction from salary, or in respect of contributions repaid after having been refunded to the contributor, or otherwise).

  “(2) The Authority may determine whether the whole or any part of that sum is to be treated as contributions for the purpose of this Act, and the amount so determined is to be treated as contributions accordingly.

  “(3) Except as provided in this section, the only sums that are to form part of a contributor's contributions for the purpose of this Act are the amounts paid by the contributor by way of standard rate of contribution in respect of the scheme to which the contributor belongs.

  “(4) In this section, standard rate of contribution means the rates referred to in sections 29, 30, 61B, 61F, 63A, 71F, 74C, 78, 81F, 83, 88C, and 88Q and in section 19 of the Government Superannuation Fund Amendment Act 1962, and any other provisions with like effect.”

• “(1A) The annual report must also include (in addition to any other requirements)—

  • “(a) a statement of responsibility for the financial statements of the Fund, signed by the chairperson of the board and the chief executive of the Authority (if any), and comprising the same statements that are required by section 42(2) of the Public Finance Act 1989 as if the Fund were a Crown entity; and

  • “(b) an analysis and explanation of the performance of the Fund over that financial year, including a comparison with the Authority's expectations about the performance of the Fund that were set out in the statement of intent relating to that financial year; and

  • “(c) a statement of the investment policies, standards, and procedures for the Fund established by the Authority under section 15L; and

  • “(d) a statement, signed by the chairperson of the board and the chief executive of the Authority (if any), certifying whether or not the investment policies, standards, and procedures for the Fund have been complied with throughout that financial year; and

  • “(e) a schedule of—

    • “(i) the investment managers, administration managers, and any other service providers used under section 19, and custodians used under section 19A, during that financial year; and

    • “(ii) the classes of investments for which each investment manager was responsible; and

    • “(iii) any changes since the last annual report in those persons.”

• “(b) at a rate calculated using a method that has been determined by the Authority, approved by the Minister, and published in the Gazette.”

• “(1) Every controlling authority in relation to a contributor must ensure that there is provided to the Authority, at such time or times as are reasonably specified by the Authority, such information as the Authority may reasonably require of that controlling authority for the purpose of administering this Act in relation to that contributor.

• “(2) The Authority must not require a controlling authority to provide information under this section unless the Authority has first consulted the controlling authority about the requirement.”

• “(c) prescribing money that may be lawfully payable into the Fund under section 14(d):

• “(d) prescribing money that may be lawfully payable out of the Fund under section 15(b):”.

• “(3) The Board may, in addition, provide services in respect of any fund or superannuation scheme that is managed by the Crown or a Crown entity or an entity whose board is appointed by the Crown and approved by the Minister for that purpose, on any terms and conditions that the Board thinks fit.”

• “(1) The Board may appoint any or all of the following:

  • “(a) a secretary to the Board and any officers, employees, and advisers that the Board considers necessary:

  • “(b) a company or other person to provide to the Board secretariat or other services that the Board considers necessary.

• “(1A) There may be paid to, or in respect of, any secretary, officer, employee, adviser, company, or other person referred to in subclause (1), out of any of the pools of the Global Asset Trust or the property of the existing schemes that the Board considers appropriate, remuneration, fees, or expenses as the Board determines.

• “(1B) The Board may, on any terms and conditions that the Board considers appropriate, subscribe for or acquire, and hold, shares or other securities issued by a company that provides (or is to provide or has provided) secretariat or other services to the Board.

• “(1C) Subclause (1B) applies whether or not—

  • “(a) the company has shareholders other than the Board; and

  • “(b) the company also provides services to other persons.

• “(1D) Any money payable by the Board in respect of shares or other securities under subclause (1B) is to be paid out of any of the pools of the Global Asset Trust or the property of any of the existing schemes or otherwise as the Board considers appropriate.

• “(1E) Sections 16, 31, and 53 do not limit or negate subclause (1B).”

• “(1) The Board may establish 1 or more committees, each of which may comprise 1 or more members of the Board or other persons as the Board thinks fit.

• “(1A) A member of the Board may be counted in the quorum, and vote, in respect of a proposal to—

  • “(a) establish a committee to consider and determine a matter; or

  • “(b) delegate to a committee any of the Board's powers in respect of a matter,—

  “whether or not the member has a conflict of interest in relation to that matter.”

“6 Delegation of Board's powers

• “(1) The Board may from time to time, by writing either generally or particularly, delegate to any committee established under this Act, or to any person, all or any of its powers including, in respect of any power of the Board to appoint investment managers, administration managers, or custodians under the trust deed for the Global Asset Trust or a trust deed for an existing scheme, the power to further delegate that power.

  “(2) Subject to any general or special directions given or conditions attached by the Board, the delegate may exercise any powers delegated to it in the same manner and with the same effect as if they had been conferred directly by this clause and not by delegation.

  “(3) A delegation continues in force (unless and until it is revoked) according to its tenor despite the fact that all or any of the members of the Board at the time when the delegation was made have ceased to hold office, and continues to have effect as if made by their successors in office.

  “(4) In the event of any member of a committee to whom a delegation has been made ceasing to hold office, the delegation continues to have effect as if made to the persons for the time being holding office as members of the committee.

  “(5) A delegate who purports to act pursuant to a delegation under this clause is presumed to be acting in accordance with the terms of the delegation in the absence of proof to the contrary.

  “(6) The delegation is revocable at will, and does not prevent the exercise of any power by the Board.”

“effective date, in relation to a cessation election, means the expiration of the day on which the notice is received by the Government Superannuation Fund Authority”.