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The Trustees have resolved that limited 'Member Investment Choice'
is to be introduced to the scheme with effect from 01 October
2004.
From that date a 'Cash Portfolio' will be introduced for members who
have completed 15 years membership of the scheme and who
are aged 55 years or over.
All other members of the scheme will continue to have the asset allocation
of their accumulations within the scheme established by the Trustees
of the scheme as has been the case since the scheme's inception.
A number of other conditions have been established for entry into and
continued investment in the 'Cash Portfolio' and these are set
out below.
Those eligible members who wish to invest their current accumulations
within the scheme, or future contributions in the 'Cash Portfolio'
will be bound by the following conditions:
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Members
may request any amount of their current accumulations within
the scheme, including both Employer and Member contributions,
be transferred to the 'Cash Portfolio' on 01 October each year.
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Either all or none of the contributions made
to the scheme from 01 October each year may be invested in the
'Cash Portfolio'. This means members are not permitted to invest
part of their or the Employer contributions in the 'Cash Portfolio' during the year.
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Once contributions have been invested in the
'Cash Portfolio' they cannot be transferred back to the member's
accumulations where the Trustees have sole discretion as to
the asset allocation.
-
The Trustees will ensure that the return achieved by the 'Cash
Portfolio' is similar to that available from bank deposits.
Their current policy to invest scheme assets across a number
of different asset classes will be curtailed by the member consenting
to take responsibility for the 'Cash Portfolio' investment decision.
Members who wish to take up the 'Cash Portfolio' option will
be required to sign a statement that it was their decision alone
to invest in the 'Cash Portfolio'.
Further information is set out below which will be useful for members
who are considering investing in the 'Cash Portfolio':
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The
aim of the 'Portfolio' is to achieve returns similar to wholesale
bank deposits by investment in secure New Zealand interest bearing
deposits.
-
The
'Portfolio' return after tax and expenses for the year to 31
March 2004 would have been 3.70 per cent.
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The
member investing in the 'Portfolio' is exposed to a risk that
if there is a high level of inflation, retirement savings will
not grow in real value over the long term.
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The expectation of a nil or negative return
is extremely low and would only occur if there were a collapse
of the New Zealand banking system or other significant and dramatic
event.
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The 'Portfolio' may be attractive to those
eligible members who are short term investors close to retirement
and wish to protect the value of their investments in the short
term. It is not suitable for those members who have a medium
to long term investment horizon - three to fifteen years.
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Investments in the 'Portfolio' will be accounted
for in a separate member account to all other member accounts
held by the member.
-
There
will be no additional charges to members who invest in the 'Portfolio'.
They will still however be required to pay the expenses of administering
the scheme as is presently the case.
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Since
its inception the scheme's after tax and expenses investment
performance has been 5.5 per cent each and every year. This
historic performance is a minimum of 1.5 per cent greater than
the after tax and expenses cash performance expected to be generated
by the 'Portfolio' in the future. It must be noted that past
performance is no guarantee of future performance and no amount
of return enforceable by members has been promised by the Trustees.
There are also some other considerations that should be taken into
account when any investment is made. The Trustees wish to bring
these to the attention of eligible members as they gather the
information necessary to make an informed decision on whether
to invest in the 'Cash Portfolio'. Some of these considerations
are:
- How
much money or income will you require in retirement ?
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Your
financial position and any other investments you currently have.
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Your
attitude to investment risk.
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The
importance of time. Ask yourself how long your funds will be
invested for until retirement and how long you will need them
in retirement. Remember that you may remain a member of the
scheme once you retire and that retirement may last over twenty
years.
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The
importance of being invested in a diversified portfolio of investments
compared with a single asset class investment such as the 'Cash
Portfolio'.
- Managing
any risks taken with your investments. Or put another way how
your investment mix may smooth the highs and lows of market returns
over any period of time.
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You
need to have an understanding of the relationship between risk
and return. The higher the returns available in the market place
the higher the risk that is being taken with your investments.
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The
Trustees recommend that you seek professional investment advice
if you are unsure about making your own investment decisions.
The scheme's web site at www.firesuper.co.nz
has a number of links to those who are able to assist you with
investment advice.
Members who wish to take this opportunity to invest in the 'Cash Portfolio'
are required to write to the Trustees seeking an Application Form
for completion. Forms are also available for downloading and printing
from the 'Access Forms and Documents' section of this web site.
You may also use any of the four methods set out on the 'Contacts page'
to make this request. The form will be sent to you by e-mail where
requested.
Completed forms are to be posted back to the Trustees either at the
postal address set out on the 'Contacts page' or in the reply-paid
envelope sent out with the Application form.
Completed forms will be accepted up to and including Friday 16
September 2004. Any forms received after that date will
be destroyed.
Any member who requires further information on the 'Cash Portfolio'
should contact the scheme Secretary, as set out on the 'Contacts
page' in the first instance, for this information.
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