Santiago Principles Self-Assessment

New Zealand Superannuation Fund

Fund Details Fund Website Search Assessments PDF version
  • Pillar 1: Legal
  • Pillar 2: Institutional
  • Pillar 3: Investment
Principle 1

1. The legal framework for the SWF should be sound and support its effective operation and the achievement of its stated objective(s).

1.1. The legal framework for the SWF should ensure legal soundness of the SWF and its transactions.

1.2. The key features of the SWF’s legal basis and structure, as well as the legal relationship between the SWF and other state bodies, should be publicly disclosed.

The legal framework and structure for the Guardians of New Zealand Superannuation (‘Guardians’, ‘we’, ‘our’) and the New Zealand Superannuation Fund (‘Fund’) are clearly and publicly disclosed in the New Zealand Superannuation and Retirement Income Act 2001 (‘Act’). The Act is available in full online. An explanation of the Guardians’ operational independence from the New Zealand Government, our governance arrangements and responsibilities are available in the Governance section of our website. They are also explained in detail in our Annual Reports.

Our legislative mandate gives us considerable freedom to invest the Fund how we see fit. There are, however, some important constraints and restrictions in place. These are detailed on our website at Constraints.

Principle 6

6. The governance framework for the SWF should be sound and establish a clear and effective division of roles and responsibilities in order to facilitate accountability and operational independence in the management of the SWF to pursue its objectives.

The New Zealand Superannuation and Retirement Income Act 2001 establishes clear operational independence for the Guardians and establishes standards of public accountability.

As an autonomous Crown entity, the Guardians is legally separate from the Crown. This means that, although we are still accountable to the Government, we have operational independence regarding investment decisions, with explicit commercial objectives. The Minister of Finance’s powers of direction are limited to giving directions regarding the Government’s expectations as to Fund performance which must not be inconsistent with the Guardians’ statutory investment objective. The operation of the Fund is overseen by an independent Board. Board members are required to have expertise in investment management and are appointed by the Governor-General on the recommendation of the Minister of Finance. The Minister’s recommendation follows nominations from an independent nominating committee and consultation with representatives of other political parties in Parliament. Essentially, this means that the Guardians operates at ‘double-arm’s-length’ from the Government.

The Guardians’ Delegations Policy provides for clear separation, within the constraints of our enabling legislation, of governance (the Board) and management (the Executive) responsibilities. The Delegations Policy is available in the Policies section of our website.

Principle 18

18. The SWF’s investment policy should be clear and consistent with its defined objectives, risk tolerance, and investment strategy, as set by the owner or the governing body(ies), and be based on sound portfolio management principles.

18.1. The investment policy should guide the SWF’s financial risk exposures and the possible use of leverage.

18.2. The investment policy should address the extent to which internal and/or external investment managers are used, the range of their activities and authority, and the process by which they are selected and their performance monitored.

18.3. A description of the investment policy of the SWF should be publicly disclosed.

Our legislation requires us to establish a Statement of Investment Policies, Standards and Practices (SIPSP) that is consistent with the statutory objective of investing the Fund on a prudent, commercial basis. The SIPSP is publicly available at: This link also provides access to the various policies that sit beneath the SIPSP and are referred to within it. The matters covered by the SIPSP include: the classes of investments in which the Fund is to be invested and the selection criteria for investments within those classes; the determination of benchmarks against which the performance of the Fund as a whole, and classes of investments and individual investments will be assessed; the balance between risk and return in the overall Fund portfolio; and the use of derivatives. Our Investment Risk Allocation Policy (which is publicly available at the above link) includes out the investment constraints set by the Board. Our governing legislation does not permit borrowing in respect of the Fund except with the consent of the Minister of Finance.

Our Externally Managed Investments Policy covers how we invest with external managers, including whether an external manager will be appointed, manager selection, monitoring and reporting. Our Portfolio Completion and Internally Managed Securities Policy covers our use of internal mandates. These policies are publicly available at the above link.

We have also published to our website a series of white papers and informational videos, explaining various aspects of our investment process (including our Reference Portfolio, diversification, selection of asset managers, and our view of long-term investing). The in-depth commentary and videos on how we invest are here and the White Papers (and other disclosures) are here.