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 New Zealand Superannuation Fund (‘Fund’) is a pool of assets on the Government’s balance sheet managed by an independent body,  the Guardians of New Zealand Superannuation (‘Guardians’, ‘we’, ‘our’), with explicit commercial objectives and clear accountability. The legal framework for the Fund and the Guardians is clearly and publicly disclosed in the New Zealand Superannuation and Retirement Income Act 2001 (‘Act’). The Act is available in full online.

The Fund has a specific purpose, as outlined in our response to GAPP 2. The Fund is used for making payments of New Zealand Superannuation to New Zealanders in the future.

The Guardians is an autonomous Crown entity, which is a type of statutory body corporate established to carry out functions at ‘arm’s length’ from the Government.  As a Crown entity, the Guardians is subject to the Crown Entities Act 2004, an umbrella Act covering all New Zealand Crown entities that operates alongside individual entities’ empowering Acts. The Crown Entities Act prevails over entities’ Acts in the event of any conflict, unless the entity’s Act expressly provides otherwise. The Crown Entities Act is available in full online. Further information about the Crown Entities Act is available on the State Services Commission’s website.

An explanation of the Guardians’ operational independence from the New Zealand Government, our governance arrangements and responsibilities is 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.

In May 2019, the Government of New Zealand announced an additional mandate for the Guardians, in to manage a domestically-focused Venture Capital Fund. Legislation for this new mandate has not yet been enacted.  At the time of writing the legislation to put this mandate in place was in development and had not yet been introduced to Parliament. The purpose and mandate of the New Zealand Superannuation Fund remain unchanged.

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 in its management of the Fund and, in conjunction with the Crown Entities Act, 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 Guardians are not required to give effect to Government policy.  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 management of the Fund is overseen by an independent Board. Board members are required by legislation to have substantial 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.


As a result of a legislation change made in 2018, the consent of the New Zealand State Services Commissioner must be obtained before the board of a Crown entity (which includes the Guardians) can finalise or vary the chief executive’s employment contract. This represents a shift of an important responsibility from the Guardians’ Board to the Crown. This change received a negative comment in the five-yearly independent review of the Guardians and Fund, commissioned by Treasury.

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 and adhere to 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 and in a manner consistent with best-practice portfolio management.

The SIPSP is reviewed annually and 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.

We have in place a target operating model based on a commitment to active investment where we have a strong expectation of meaningful risk-adjusted returns net of costs, and the need to build an operation that is agile and scalable. Our ideal operating model has:

  • simpler investment processes which enhance our ability to consistently rank investment opportunities and prioritise our efforts;
  • greater influence over the allocation of our capital to different investment risks;
  • fewer, but deeper, external manager and advisor relationships, based on more of a partnership approach; and
  • a more concentrated, active investment portfolio.

Our Investment Risk Allocation Policy (which is publicly available at the above link) includes the investment constraints (risk appetite) 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, manager selection, appointment, 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 and commentary, 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.