Number 58 - 09 March 2001

Interim interest rate reduced to zero
At their December meeting the Trustees considered the matter of the interim interest rate and resolved to reduce the rate from four and a half to four per cent with effect from 06 December 2000.

This reduction was in response to the particularly volatile investment market conditions at the time and the Trustees' knowledge of the downward performance trend that was becoming apparent in the December 2000 quarter.

Upon receipt of the scheme's performance figures for the quarter ended 31 December, in late January, the Trustees reviewed the interim interest rate again and resolved to reduce the rate to zero with immediate effect.

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 from 01 April until the time the rate is set.

Thanks
Members who advised the scheme of the whereabouts of Garth Jackson are thanked for their help with this. Thank you !

Remaining a member after retirement
Members are reminded that they are permitted to remain a member of the scheme following them ceasing employment with the New Zealand Fire Service. The details of this ‘deferred membership' are contained in a brochure the Trustees have included with this Supernews for your information.

Members are asked to review the contents of the brochure whilst taking into account the long-term performance and management expenses of the scheme.

The Trustees believe both the scheme's long term performance, as set out in Supernews 57, and the Management Expenses Ratio, which is set out in each Trustee Annual Report are unable to be matched by almost all retail superannuation schemes and investment products in New Zealand. These two factors significantly enhance the after tax and expenses performance of the scheme compared to these investments.

At 01 March 2001 the scheme had 60 deferred members.

Get your Supernews quicker
If you wish to have your Supernews delivered to you individually by e-mail from now on please supply your e-mail address to the Secretary to the Trustees 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 as quickly as possible.

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

All existing arrangements for the delivery of Supernews to members and stations will continue unchanged.

New Benefit Cessation Forms
As a result of the passing of the Taxation (FBT, SSCWT and Remedial Matters) Act in September 2000 the scheme has had to update the form used by members who are making application for a benefit from the scheme.

The Cessation Advice and Discharge form has now been updated to capture the necessary information to establish any Fund Withdrawal Tax liability.

Copies of the new form are available from the undersigned, District Chief Fire Officers, Fire Service Regional offices and here at:

www.firesuper.co.nz/forms

With effect from the publication of this Supernews only the new form will be accepted by the Trustees. If the old form is received by them the member will have it returned and be required to fill out the correct form. Members are further reminded that all the questions on the front page of the form must be completed or the form will be returned to them for completion. Members are thanked in advance for their assistance with these matters. Thank you !

Performance to 31 December
In Supernews 55 the Trustees began reporting the scheme's after tax performance and a comparison against other retirement savings providers who invest in balanced units.

Given the positive response from members this style of reporting will continue.

For the quarter ended 31 December 2000 Melville Jessup Weaver has published the following performance for other retirement savings providers in their ‘Investment Manager Survey of Balanced units'. The Trustees thank MJW for allowing the scheme to use the survey results.

The after tax and expenses performance of the scheme is also included for comparison. The results in per cent are:

AMPHG Investors - 6.5

ANZ Asset Mngt - 1.1

Armstrong Jones - 3.9

AXA/Alliance - 3.8

Bank of NZ - 3.8

Bankers Trust - 2.8

Colonial First State - 1.7

Guardian Trust - 4.0

NZ Fire Service - 6.1

NZ Funds Mngt - 1.7

Tower Asset Mngt - 0.8

Average return - 2.8

Index return - 2.3.

The scheme's performance is disappointing when compared to other providers, but is able to be explained by the fact that the scheme invests in Index Funds for New Zealand and offshore equities where losses cannot be tax effected. The estimated effect of this was minus 2.3 per cent.

The scheme is also exposed to offshore equities at 35 per cent of total assets compared to the market average of 25 per cent. The estimated effect of this was minus 1.8 per cent for the quarter.

The scheme's after tax and expenses performance for the nine months to 31 December is negative 1.37 per cent. Members are reminded once again that investment performance should be judged over the medium to long-term and not short-term periods such as three months.

New Chairman of Trustees
Members are advised that with effect from 06 December 2000 Steve Warner has been elected by the Trustees to replace Leonce Jones as the Chairman of Trustees.

Thanks goes to Leonce for the work he did as Chairman. Leonce is remaining as a Trustee of the scheme.

Changed your address lately ?
Members are reminded that they should ensure the scheme always holds their correct postal address. This is particularly important as the Trustee Annual Report will be posted to members at this address in early June.

You can do this by completing a New Zealand Post change of address card and posting it to the scheme, or you can choose one of the alternative methods set out on the front page of this Supernews.

BARRY DENT

SCHEME SECRETARY