Super fund report card - room for improvement

A review of the Government Superannuation Fund Authority is largely positive, although it does recommend some opportunities to improve policies and practices.

Carried out by JANA Investment Advisers and tabled in Parliament today, the review found that the authority met best practice in most areas and had effective board and management oversight.

"The Government Superannuation Fund has $3.3 billion invested, so it makes up a significant part of the Crown’s balance sheet,” Finance Minister Bill English said. “It is important those assets are well managed."

However, JANA took the opportunity to identify areas for further improvement.

The first of these was the lack of active involvement at board level of the authority's investment adviser during discussion of key investment decisions.

“JANA believes that the investment adviser should be present at the board to participate in the consideration of key investment decisions,” the review said.

Although the authority's information and financial management systems appeared appropriate to meet its requirements and were in line with those of similar businesses, the review said those systems would be enhanced with the implementation of an over-arching business/continuity/disaster recovery plan, which would reduce reliance on key personnel and ad hoc processes and procedures.

It also said the authority's information management and investment functions would be strengthened if comprehensive written documentation for the application and maintenance of all internal investment models were put into place, and that on an ongoing basis these were reviewed annually or whenever changes or enhancements were made.

“JANA notes that the issues identified in the report have not resulted in any material losses to date, nor have they negatively impacted on the reputation in any way.

“We believe that implementation of our recommendations would enhance the operation of the authority, maximise the potential to meet best practice and reduce the risk of non-compliance.” 

The review is carried out every five years.