Firesuper - About the Scheme

TThe interim interest rate has recently been set at 2.45 per cent to reflect the after tax and expenses performance of the scheme for the period from 01 April until 31 August 2004.

The Trustees review the rate on a monthly basis.

Members are reminded the interim interest rate is the interest rate that is paid to members who are closing their membership of the scheme during the financial year.

Members are further reminded that the interim interest rate is also included in member account balances provided on the scheme's web browser.

Performance to 30 June

For the quarter ended 30 June 2004 Melville Jessup Weaver (MJW) has published the following net performance information 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 as a comparison.

The after tax and expenses results in per cent are:

Alliance Capital	1.5
AMP Capital	1.9
Arcus Inv. Mngt.	0.8
Bank of NZ	1.9
Bankers Trust	0.5
NZ Fire Service	2.3
Tyndall	0.9
ING	3.6
Tower Asset Mngt	1.5

For the quarter the average return was 1.7 per cent and the index return was 1.5 per cent.

Members would have to agree that the performance of the scheme for the quarter ended 30 June 2004 has been 'particularly good'.

Members are reminded once again that investment performance should be judged over the medium to long-term and not short term periods of three months.

Investment issues

Members are advised that the Trustees recently resolved to appoint Alliance Bernstein to manage 12.5 per cent of the scheme's assets, with a minimum amount of $ 25 million, in their active Global Equity Value Trust.

The funds for this investment will be sourced from the passive offshore equity asset class, currently managed by AMP Capital Investors in their SuperWiNZ Fund.

This change will further reduce the volatility of the scheme's returns.

This new investment will commence once the necessary Investment Agreement has been executed by the Trustees.

Business planning

Members are advised that following a further business planning meeting in February the Trustees placed several proposals to amend the Trust Deed of the scheme before the Members of the New Zealand Fire Service Commission in July.

Members will be advised of progress in future editions of Supernews.

How does your scheme compare with other Balanced Funds ?

In June 2004 Consumer published an article on balanced funds.

The article reviewed the performance of thirteen balanced funds that had been around for more than 10 years and had over $ 100 million invested in them. Consumer compared their performance for a period of ten years to 29 February 2004 and found that their after tax, fees and expenses return was less in all cases than what could have been earned from term deposits.

The article suggested that it was mostly the fees charged by these balanced funds that had attributed to their poor performance.

To enable a comparison the average performance after tax, fees and expenses for the ten years ending on 29 February 2004 of your superannuation scheme and of the balanced funds in the Consumer article are set out below:

Your scheme	4.20 %
Balanced Funds	3.18 %
Term Deposit	4.30 %
Inflation	2.00 %.

As a further comparison the average 6-month term deposit performance and the average rate of inflation for the period to 29 February 2004 are also included.

Your superannuation scheme has a very similar asset allocation to the balanced funds in the June article and the

Trustees regard this superannuation scheme as a 'balanced fund'. This is confirmed by the scheme's Trustees in their Investment Objectives and Strategy.

Your superannuation scheme invests in many of the same products that the balanced funds mentioned in the Consumer article invest in.

The performance difference between this scheme and the balanced funds in the article is simply the significantly lower fees paid by the members of this scheme.

This is an area that the Trustees have been highlighting in their Annual Reports over the last five years since they commenced using an international method of measuring the expenses of the scheme. The scheme's MER - Management Expenses Ratio - for the year to 31 March 2004 was 0.371%. This is acknowledged in the industry as being one of the lowest. A comparison of MER over the last five years is contained at page 11 of the Trustee Annual Report.

The Trustees' view is that the members should be the judge of the performance of the scheme compared to like products over the medium to long term. The above figures are conclusive proof that you are a member of an extremely well performing superannuation scheme compared to other like products.

New Trustee

Following Kevin Peacock's retirement from the Fire Service earlier this year the New Zealand Fire Service Commission appointed Russell Wood, Chief Fire Officer of the Auckland City East Fire District, to be a Trustee of the scheme from the end of the Trustee meeting held on 02 June 2004.

Our thanks go to Kevin for a job well done over many years. Mary and Kevin were farewelled by the Trustees in Wellington in September.

Lost soul

If any member knows the present whereabouts of Aaron Blake, formerly of the Southern Communications Centre, could you please ask him to contact the scheme at any of the addresses set out on the front page of this Supernews. Thank you !

$ 200 million contributor

Members are advised that Richard Hobbs, of Christchurch, was chosen by Jacques Martin NZ Ltd as the member who made the contribution which achieved the sum of $200 million worth of assets in the scheme.

Richard and his partner joined the Trustees in Wellington in September to celebrate this achievement and took the time to join the Trustees at their September Trustee meeting.

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BARRY DENT

SCHEME SECRETARY