Number 55 - 22 September 2000

Interim interest rate remains at zero
At their last meeting the Trustees resolved to maintain the interim interest rate at zero. Given the volatility of all investment markets they also resolved to deal with any sudden changes in the investment performance of the scheme immediately by either increasing or reducing the interim interest rate.

Pleasingly, there has been no need to amend the interim interest rate since that meeting. The Trustees will consider the investment report for the quarter ended 30 June 2000 at their September meeting and the scheme's performance for that period will be reported in the next Supernews.

Members are reminded the interim interest rate is the rate that is paid to members who are closing their membership during the financial year. It is also a guide as to the performance of the scheme.

Lost soul
Any member who is aware of the present address of Ross Brown, a member of the scheme formerly employed in the Christchurch and more latterly the Auckland Brigade should advise him to contact the scheme as soon as possible.

This may involve a payment at the time to the member's former spouse.

At a recent member meeting there was some confusion as to the situation where a member subsequently retired from the New Zealand Fire Service as a result of a loss of medical fitness. It was thought that the member's benefit would be made up to the full two times salary irrespective of the matrimonial property settlement.

This is not correct. In such a case the amount of the matrimonial property settlement would be deducted from the two times salary to be paid as a retirement benefit.

The same applies in the case of any other benefit paid to a member who has utilised their accumulation at any time to make a matrimonial property settlement. The benefit paid will reflect the reduction in the retirement accumulation by the amount used to make the matrimonial property settlement.

And some changes
Where members utilise their retirement accumulation to finalise a matrimonial property settlement and have not completed fifteen years service in the scheme they can be placed in a situation where because the total settlement is paid from their member accumulation that their accumulation is effectively placed in overdraft depending on a combination of factors that exist at the time.

Jacques Martin have accepted a submission from the Trustees that where this occurs the member and the employer accumulation will be adjusted to clear the overdraft figure on 01 April in the year after the member completes fifteen years service in the scheme.

Annual report posted
Members are advised that the Annual report and member statement for the year ended 31 March 2000 were posted to your last advised postal address on 29 June.

Any member who has not yet received their Annual report and member statement should contact the scheme at any of the addresses set out on the front page of this Supernews to have these documents delivered to them.

Asset allocation changes
Earlier this year the Trustees carried out a significant review of various aspects of the scheme's investments given a number of new products and significant volatility in all the worlds investment markets.

Since then they have been moving to implement those aspects of the review that were agreed. The changes agreed are:

• New Zealand property will be reduced from ten per cent of the scheme's assets to five per cent over time. No assets will be sold to achieve this new allocation of funds.
• A new asset class will be created for off-shore emerging markets and 2.5 per cent of the scheme's assets will be placed in this asset class.
• The scheme will adopt a currency hedge to the NZ dollar of thirty per cent for off-shore equities and emerging markets assets.

The Trustees decided to defer a decision on investment in both global credit funds and off-shore property funds at this time, although both asset classes will be monitored for future investment.

The Trustees are also investigating the investment of NZ cash and bonds in a wholesale superannuation fund rather than in individual assets as is currently the case. Members will be advised of any changes if they are made.

Get your Supernews quicker
If you wish to have your Supernews delivered to you individually by e-mail please supply your e-mail address to the scheme at any of the contacts set out on the front page of this Supernews.

The Trustees are mindful of the pace of developing technology and of the need to be able to keep in touch with members on a personal level and as quickly as possible.

It is with this in mind that Supernews will be available to individual members by e-mail.

Members are further reminded that Supernews is available on ths web site

www.firesuper.co.nz/news

within a few days of it being published and in an e-mail version on ‘FireNet' at

http://fire.net.nz/

A hard copy of Supernews will still be sent to all stations irrespective of these enhanced arrangements and to deferred members who do not request a copy electronically.

Performance comparison

The Trustees feel it is appropriate to compare the performance of other retirement savings providers against the scheme's performance to ensure members are aware of how the scheme is performing. The following figures are taken from a relatively new investment survey known as the ‘Melville Jessup Weaver Investment Manager Survey of Balanced units' and are for the year to 31 March 2000. The performance is net of taxation and fees. Our thanks to MJW for allowing the scheme to use the survey results.

The results in per cent are:

AMP Asset Mngt. 8.6

ANZ Asset Mngt. 6.1

Armstrong Jones 9.3

AXA 8.0

Bank of NZ 8.9

Bankers Trust 11.4

Colonial First State 7.0

Guardian Trust 8.3

NZ Fire Service 11.56

NZ Funds Mngt 16.6

Royal & Sun Alliance 8.3

Tower Asset Mngt 5.6

WestpacTrust 7.7

Average return 9.1

Index return 7.2

The results confirm the view that the scheme is performing very creditably irrespective of the methods used to measure performance.

BARRY DENT

SCHEME SECRETARY