Santiago Principles Self-Assessment®

The New Zealand Superannuation Fund (‘Fund’ or ‘NZ Super Fund’) is a pool of assets on the New Zealand 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 Generally Accepted Principles and Practices (GAPP) 2. The Fund will be used to help pay for the cost of making New Zealand Superannuation payments in the future. 

The Guardians is an autonomous Crown entity, which is a type of statutory body corporate established to carry out functions in respect of the Fund 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 Public Service 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.

The Guardians also manages an additional mandate - a domestically-focused venture capital fund, the ‘Elevate NZ Venture Fund’. 

The Elevate NZ Venture Fund is entirely separate to, and segregated from, the NZ Super Fund. While the Elevate NZ Venture Fund is not the subject of this assessment, we briefly summarise the mandate below.

The Guardians has responsibility for the Elevate NZ Venture Fund’s governance and oversight, and under the policy design the Fund is managed externally by New Zealand Growth Capital Partners Limited (NZGCP), another Crown entity, with a fund-of-funds model. The fund-of-funds model means that NZGCP makes investment decisions for the Elevate NZ Venture Fund, which invests into venture capital funds alongside other investors. The legal framework for the Elevate NZ Venture Fund is publicly disclosed in the Venture Capital Fund Act 2019, also available online. The legislation for the Elevate NZ Venture Fund was developed so as to specifically preserve the operational independence of the Guardians vis-à-vis the NZ Super Fund. 

We don’t believe that the Elevate NZ Venture Fund meets the criteria for a sovereign wealth fund from the Santiago Principles, in particular the requirement for investment in foreign financial assets and the investment for financial objectives (given the additional objective of domestic venture capital market development included in the Venture Capital Fund Act 2019). As a result, this assessment focuses only on the NZ Super Fund. References to the Elevate NZ Venture Fund are included where it impacts on the governance structure of the NZ Super Fund.

The policy purpose for the NZ Super Fund was clearly articulated at the time that it was established and is reflected in its enabling legislation. New Zealand has an ageing population, which means funding the national superannuation scheme – a public pension currently paid to all New Zealanders over the age of 65 - falls on a proportionally shrinking group of working age New Zealanders. The purpose of the NZ Super Fund is to partially pre-fund the cost of New Zealand Superannuation to help smooth its cost between today’s taxpayers and future generations. Doing so will reduce the taxation burden imposed on future New Zealand taxpayers.

The Guardians invests Government contributions – and returns generated from these investments – in New Zealand and internationally, in order to grow the size of the Fund over the long term. This intergenerational purpose is explained in the Purpose and Mandate section of our website and in a Treasury paper “Golden Years – Understanding the New Zealand Superannuation Fund”. Comprehensive explanations of the purpose of the NZ Super Fund, the Elevate NZ Venture Fund, the differences between the funds, and the Guardians, as well as details of the Guardians’ strategic objectives, are provided in the Statements of Intent, Statements of Performance Expectation and Annual Reports for the Guardians and Funds.

The size of the NZ Super Fund and the returns generated by the Fund have no direct domestic macroeconomic implications for New Zealand from year to year. (See also our response to GAPP 4 for key dates relating to flows into and out of the Fund.) The Fund does, however, constitute a substantial and growing proportion of Crown assets. 

These assets are intended to fund a portion of the Government’s future New Zealand Superannuation expenses. As such, the Government sets overall fiscal policy for the medium term by adopting a comprehensive perspective on the various components of its balance sheet. 

The Guardians provides monthly financial data to the Treasury (the Government’s lead economic and financial advisor), which contributes to the Treasury’s production of the Government’s accounts and economic data. Data provided by the Guardians is also used by Treasury to model the annual contributions that the Government is required to make to the Fund under the Act (as noted in GAAP 4). 

Meanwhile, the Fund’s investment decisions and other activities are commercially-oriented and made independently of the stance of prevailing fiscal and monetary policy.

A key design feature for the Fund was to be very clear about the arrangements for its funding, withdrawal and use. These are spelt out in the Act.

Contributions

The Act sets out a formula for calculating the level of capital contribution required from the Government year to year in order to achieve the policy objective, based on a forty-year rolling horizon. Prior to the start of each financial year, Treasury must calculate the amount of required capital contribution implied by this formula and publish it in the Budget Economic and Fiscal Update, along with a statement of assumptions. The model used to calculate the contribution is publicly available on the New Zealand Treasury website.

Recognising that the Government must adhere to the “principles of responsible fiscal management” set out in the Fiscal Responsibility Act 1994, the Act does permit the Government to contribute less than the amount calculated by the formula. However, if the Government does this it is required to publicly explain the reasons for doing so.

As at 30 June 2025, the Government had contributed $27.4 billion to the Fund. 

Withdrawals

Withdrawals from the NZ Super Fund are only permitted up to the amount determined by the contribution formula and may be used solely to pay for New Zealand superannuation. Withdrawals are currently forecast to begin in or about financial year 2028. 

Financial data for the NZ Super Fund is supplied direct to Treasury on a monthly basis for incorporation into New Zealand’s Government Accounts, which are published on the New Zealand Treasury website. 

Monthly information on Fund performance and six-monthly disclosure of Fund holdings is publicly available on the Guardians’ website.

The New Zealand Superannuation and Retirement Income Act 2001 establishes clear operational independence for the Guardians in its management of the NZ Super 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 Government. This means that in respect of the NZ Super Fund, although we are still accountable to the Government, we have operational independence regarding investment decisions, with explicit commercial objectives as set out in the Act. The Guardians is not required to give effect to Government policy in respect of the NZ Super Fund. The Minister of Finance’s powers of direction concerning the NZ Super Fund are limited to giving directions regarding the Government’s expectations as to the NZ Super Fund performance which must not be inconsistent with the Guardians’ statutory investment objective. 

The Guardians 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.

Investment objectives

The investment objectives for the NZ Super Fund are embodied in the legislation that created the Fund. 

Under the Act, the Guardians must invest the NZ Super Fund on a prudent, commercial basis and, in doing so, must manage and administer the Fund in a manner consistent with:

• best practice portfolio management;
• maximising return without undue risk to the Fund as a whole; and
• avoiding prejudice to New Zealand’s reputation as a responsible member of the world community.

The Fund has no secondary objectives.  

Board member appointment

Procedures for appointing Board members are set out in the Act and are published on our website. (See also GAPP 6 as to procedures for ensuring that Board members are independent and suitably qualified).

Under the Act, Board members may be appointed for terms of up to five years and may be reappointed for further terms. The Board must consist of at least five, but not more than seven, members. The Governor-General may, on the advice of the Minister, remove a member from office for a reason that in the Minister’s opinion justifies the removal. The Governor-General removes a member by sending written notice to the member and a copy to the entity.

Oversight

The framework for oversight of the NZ Super Fund is established by the New Zealand Superannuation and Retirement Income Act and the Crown Entities Act. The Government exercises oversight over the NZ Super Fund and the Guardians through the Minister of Finance, Treasury, Parliamentary select committees and the Auditor General. The Minister of Finance is responsible for overseeing and managing the Government’s interest in, and relationship with, the Guardians, and Treasury supports the Minister with this engagement. 

The Guardians is required to produce a range of reporting documents (see GAAP 10) which are tabled in Parliament, and the Guardians is periodically required to appear before Parliamentary select committees. 

The financial statements for the Fund are audited by the New Zealand Auditor General. The Act also provides for a five-yearly independent review of the Guardians’ performance in relation to the Fund, against specified criteria. Copies of the Fund’s financial statements and the five-yearly reviews are published on our website. are published on our website.

The Guardians has sole responsibility for managing the NZ Super Fund in accordance with an explicitly commercial statutory mandate (see  GAPP 7)  and has been given broad powers to do so. It is structured to operate independently from the Government (see GAPP 6) and must publish investment policies, standards and procedures consistent with its duty to invest the Fund on a prudent, commercial basis.

The roles and responsibilities of the Board and its Committees are set out in statute and in the Board Charter which is published on our website. These responsibilities include a requirement for Board members to act in the best interests of the Guardians.

Board members are required by statute to have substantial expertise in the management of financial investments so the Board has the necessary competency to carry out its functions. At the organisational level, there is an ongoing focus on the capabilities needed to deliver our desired investment style and strategies. The statutory process for the appointment of Board members ensures that Board members are independent and suitably qualified (see GAPP 6).

Board members are required to disclose interests that could give rise to an actual or potential conflict of interests, and a Board member with a conflict of interest is excluded from related deliberations and decisions. 

An independent review of how effectively and efficiently the Guardians is performing its functions in relation to the NZ Super Fund is undertaken at least every five years (see GAPP 10). The most recent review was completed in 2024.

Responsibility for the management of the NZ Super Fund in accordance with an explicit commercial investment objective is vested in the Guardians, which operates independently from the Government (see GAPP 1 and 6). 

The Guardians’ Board Charter and Delegations Policy provides for clear separation, within the constraints of our enabling legislation, of governance (the Board) and management (the Executive) responsibilities. 

The Board is responsible for setting the overall risk and return profile for the NZ Super Fund. Responsibility for the individual investment decisions and operational decisions of the NZ Super Fund has been delegated by the Board to management. Management is required to operate within a policy framework including risk appetite and investment constraints approved by the Board. 

Accountability for the Guardians and the NZ Super Fund is established in the New Zealand Superannuation and Retirement Income Act, the Crown Entities Act, the Public Finance Act and the Public Audit Act, which are available publicly. 

The Guardians is accountable to the Minister of Finance (and, through the Minister, to Parliament). It is required to produce:

• A Statement of Intent (at least every three years)
• An annual Statement of Performance Expectations
• An Annual Report including audited financial statements and a Statement of Performance.

These documents are tabled in Parliament and published on the Guardians’ website.

The Guardians is subject to an annual review by a Parliamentary Select Committee and ongoing monitoring from Treasury.

The Guardians also reports quarterly to the Minister of Finance on Fund performance and significant activity, and as required on a ‘no surprises’ basis.

The Minister of Finance writes an annual “Letter of Expectations” to the Guardians. The Letter of Expectations is a formal but not legislative tool that provides an opportunity for the Minister to consider and set out in a timely manner his or her expectations of the Guardians over the coming year. The Guardians' Board must consider the Minister's expectations in the course of developing the Guardians' Statement of Intent and annual Statement of Performance Expectations. The Minister may also write an enduring Letter of Expectations which again is a formal but not legislative tool for the Minister to set out expectations of the Guardians that go beyond the coming year. These letters and the Guardians’ responses are published on our website.

The Guardians is required to establish, and adhere to, a Statement of Investment Policies, Standards, and Procedures (SIPSP) for the NZ Super Fund which is published on our website. This provides a basis by which the public can judge the Board’s management of the Fund. The SIPSP is reviewed annually and the Board and Chief Executive must certify annual compliance.

The Guardians is also required to publicly disclose information under the Official Information Act 1982, unless there are statutory grounds for withholding the information.

Board members have statutory duties and are accountable to the Minister of Finance for the performance of those duties. Management is accountable to the Board. Our Board Charter and Delegations Policy set out the Board’s accountabilities and how it delegates to management.

The Guardians’ performance must be periodically reviewed by an independent person appointed by the Minister of Finance. The objective of the review is to assess how effectively and efficiently the Guardians are performing their functions. The review report must be presented to Parliament and copies of the reports are published on our website. Copies of the independent reviews to date are available on our website. 

Our Board Charter and Delegations Policy clearly set out accountabilities between Board and Management.

An Annual Report for the Guardians is published annually to a deadline set by statute. The Annual Report includes financial statements for the Guardians (prepared in accordance with New Zealand Public Benefit Entity Accounting Standards) and for the NZ Super Fund (prepared in accordance with International Financial Reporting Standards).

The Guardians also publishes an annual Climate Change Report including a carbon footprint of the NZ Super Fund. This Report is aligned to the Aotearoa New Zealand Climate Standards published by the External Reporting Board.

The Guardians  published its first Stewardship Report in 2024, in line with the Aotearoa New Zealand Stewardship Code.

The Guardians also produces a Global Reporting Initiative index to support its Annual Reports and other public reporting.

These reports collectively demonstrate the Guardians’ commitment to transparency, accountability, and alignment with both national and international reporting standards.

The financial statements for the NZ Super Fund and the Guardians are audited by the Office of the Auditor-General, acting through its appointed agent. The current auditor is a partner at EY. These audits are carried out in accordance with the Auditor-General’s Auditing Standards, which incorporate the Professional and Ethical Standards and International Standards on Auditing (New Zealand) issued by the New Zealand Auditing and Assurance Standards Board. 

The audited financial statements are included in the Guardians’ Annual Report. In addition to audited financial statements, unaudited prospective financial statements for the NZ Super Fund are published in our annual Statement of Performance Expectations. The Annual Reports and Statements of Performance Expectations are each tabled in Parliament and published on our website.. 

The NZ Super Fund’s annual carbon footprint is subject to limited assurance, currently provided by KPMG. The assurance for 2023/24 was carried out in accordance with the International Standard on Assurance Engagements (New Zealand) 3000 (Revised) and International Standard on Assurance Engagements (New Zealand).

The Guardians’ internal audit process is independent of operational management and reports direct to the Chair of the Audit & Risk Committee. Internal audit activity is regularly reviewed by the Guardians’ Audit & Risk Committee, and internal audit reports are presented to each meeting. Reviews of core processes and activities are undertaken in accordance with an annual plan approved by the Audit & Risk Committee.

Ethical standards

The Guardians has a Code of Conduct for the Board and for employees (set out in the People & Culture Policy), both available on our website. These Codes of Conduct set out the Guardians’ expectations for appropriate ethical and professional behaviour by Board members and staff on various matters including conflicts of interest, political participation, gifts and hospitality, confidential information and, for staff, securities trading. These Guardians’ Codes incorporate standards issued by the Public Service Commission for Crown entities and public sector employees.

Board members’ duties under the Crown Entities Act include obligations to act with honesty and integrity, and in good faith. The Act also prescribes detailed conflicts of interest disclosure requirements for Board members.

To instil a culture of ethical behaviour and transparency, all staff complete mandatory training on core Code of Conduct topics such as fraud awareness, cyber-security, ethics and health and safety requirements.

Staff complete a six-monthly attestation process covering compliance with conflicts of interest, gifts and hospitality, health and safety, personal trading and authorities. Senior leaders attest their team members are compliant with their responsibilities, and policy owners attest their policies remain up to date and complete.

The Guardians’ policy framework also includes policies on Procurement and Outsourcing, Communications and Engagement and Travel & Sensitive Expenditure.

We maintain registers of potential and actual conflicts of interests for Board members and staff. Details of Board, management and senior staff conflicts are disclosed publicly as part of the Guardians’ annual Parliamentary Select Committee Review, available on our website. 

Registers of gifts and hospitality are also maintained and published on our website. 

Professional standards

Board members are required by legislation to have substantial expertise in investment management and candidates are nominated by an independent nominating committee (see GAPP 6). Board members’ skills, experience and professional qualifications are detailed in their biographies on our website.

A structured induction and ongoing education and development programme for Board members ensures that they remain effective in their roles. Performance of the Board and Board members is regularly evaluated.

The Guardians’ frameworks for staff recruitment and selection and for performance review and individual development are set out in our People & Culture Policy (which is published on our website). The recruitment process includes psychometric testing for all staff.

There is a structured induction process for new staff.

Each staff member has an individual development plan which focuses on maintaining and enhancing professional competence. These plans are aligned with the Guardians’ strategic objectives and supported by regular development discussions across all levels of management. The Guardians also supports continuing professional development for specific functions (as required, for example, by the CFA Institute, NZ Law Society and Chartered Accountants ANZ).

The percentage of operating expenditure that is spent on training is disclosed in the Annual Report.

Biographies including professional qualifications of the Guardians’ Leadership Team are detailed on our website in the Management section. Data on staff academic qualifications is disclosed in the Guardians’ Annual Reports.

The Guardians maintains professional memberships, which frequently involve member codes of conduct or similar membership requirements, in order to remain up-to-date on the latest professional standards or ethical requirements from other organisations and incorporate these into the Guardians’ own standards. These memberships are disclosed as part of the Guardians’ annual Select Committee Review.

Adequate legal protection is provided for Board members and staff acting in the good-faith conduct of their official duties though indemnification and insurance as well as statutory immunity from civil liability.

Copies of all Guardians’ policies are published on our website.

Under the Crown Entities Act, the Board is required to ensure that the Guardians operates efficiently and effectively and in a financially responsible manner. 

All dealings with third parties (e.g. commercial fund managers, counterparties, custodians, portfolio companies, co-investors and external services providers) are based on economic and financial grounds. The Guardians has a number of internal policies setting out how we interact with third parties all of which are published on the Guardians website. These include our Direct and Externally Managed Investments Policy and related Procedures, which set out how we evaluate, appoint and monitor investment managers and our Procurement & Outsourcing Policy, which provides a framework for ensuring that procurement and outsourcing is managed effectively and fairly. Also relevant is the Portfolio Completion and Internally Managed Investments Policy which covers selection and management of counterparties and portfolio completion agents, and our Delegations Policy which covers the authorities and responsibilities of the Guardians' Board and management.

The Guardians does not maintain overseas branches or operating subsidiaries. All investment activities in foreign jurisdictions are conducted from New Zealand. 

Local legal and tax advice is obtained when the NZ Super Fund is making investments in overseas entities to ensure compliance with local laws. Through third-party sources, the Guardians actively monitors legislative developments in jurisdictions in which the NZ Super Fund makes/manages investments. 

Our investment process includes thorough due diligence and risk assessment procedures that incorporate legal, tax, and regulatory considerations. These are embedded in internal policies such as the Direct and Externally Managed Investments Policy and the Portfolio Completion and Internally Managed Investments Policy, which guide the selection and management of external managers, counterparties, and portfolio completion agents.

The investment mandate for the NZ Super Fund and the operational independence of the Guardians as manager of the Fund are established by statute. Information on our governance framework, objectives, how we invest and our operational independence from the New Zealand Government is published on our website and within our Annual Report and Statement of Intent. 

Links to the relevant legislation, governance information published on our website, and to our Annual Reports, Statements of Intent and Statements of Performance Expectations are provided in responses to preceding GAPPs.

Audited financial accounts for the NZ Super Fund are published in our Annual Report (which is tabled in Parliament), and unaudited prospective financial statements in our Statement of Performance Expectations. These are public documents and links to them have been provided under preceding GAPPs. 

Our website includes detailed information on NZ Super Fund performance, including explanations of our two investment performance benchmarks:

• Passive Reference Portfolio benchmark – against which we measure the value added to the Fund by the Guardians’ active investment strategies; and

• Treasury Bills - a measure of the cost to the Government of contributing capital to the Fund, instead of using the money to pay back debt.

Our Statement of Intent sets out our expectation that the NZ Super Fund will outperform the Treasury Bill benchmark by at least 2.8% p.a. averaged over rolling 20year periods.

We provide a breakdown of the drivers of value add annually, in our Annual Reports, along with an overview of portfolio activity during the year.

Investment performance information since inception, and over the last one, five, 10 and 20 year periods, is updated on our website on a monthly basis.

Our website also includes information on Fund expenditure as a percentage of funds under management over a 10 year period and a copy of the most recent CEM Benchmarking annual cost structure survey of peer funds. 

A list of the NZ Super Fund’s portfolio holdings is also published six-monthly.

Our legislation requires us to establish and adhere to a SIPSP for the NZ Super Fund 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, maximising return without undue risk and avoiding prejudice to New Zealand’s reputation as a responsible member of the world community.

The SIPSP is reviewed annually and is publicly available on our website.

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 NZ Super Fund 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 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 Direct and Externally Managed  Investment Policy and Direct and Externally Managed Investment Procedures sets out the principles we follow when making investments to capture active returns carried out by the Direct and External Investments and Partnerships Teams, whether those investments be made directly, through or alongside managers or via collective investment vehicles.. Our Portfolio Completion and Internally Managed Securities Policy covers how we ensure the Fund meets our desired risk allocations and the related management of internal investment mandates.Our Derivatives Policy aims to implement effective controls and frameworks to ensure that all aspects of derivative use are effectively managed. These policies and procedures are publicly available at the above links.

We have also published to our website a series of informational videos and commentary, explaining various aspects of our investment process.

Investment mandate

Our legislative mandate requires us to invest the NZ Super Fund on a prudent, commercial basis and, in doing so, to manage and administer the Fund in a manner consistent with: 

1. Best-practice portfolio management; 
2. Maximising return without undue risk to the Fund as a whole; and
3. Avoiding prejudice to New Zealand's reputation as a responsible member of the world community. 

Consistent with all three elements of the investment mandate for the NZ Super Fund, we incorporate sustainable investment considerations into our investment decisions and processes, including allocation, selection and post-investment management. In line with our sustainable finance approach, we also take into account the implications of our investments for the environment and society. The Statement of Investment Policies, Standards and Procedures for the NZ Super Fund and our Sustainable Investment Framework set out our approach. We report on how we are progressing our sustainable investment goals in an annual Sustainable Investment Report, included in our Annual Report. All of these documents are available on our website. 

An independent view of whether the Guardians is managing the NZ Super Fund in accordance with its mandate is provided though the five-yearly independent reviews required under the Act. These reviews and our responses to them are available on our website.

Our participation in the annual CEM Benchmark’s investment management cost survey, which reports on the NZ Super Fund’s investment costs relative to peers, also provides an independent view on sound asset management practices. The performance metrics that we report on in our annual Statement of Performance (included in the Annual Report) include achieving a rating of ‘median cost, value adding’ or better relative to peers in the CEM survey.

Other considerations

The Minister of Finance can issue non-binding directions to the Guardians regarding the Government’s expectations as to the Fund’s performance provided that this is not inconsistent with the investment mandate outlined above. The Guardians must have regard to such directions. To date only one direction has been issued (in 2009). The direction notes that “it is the Government’s expectation, in relation to [NZ Super] Fund performance, that opportunities that would enable the Guardians to increase the allocation of New Zealand assets in the Fund should be appropriately identified and considered by the Guardians.” The direction is not considered to be inconsistent with the Guardians’ duty to invest the Fund on a prudent, commercial basis, and the direction remains subject to that duty. We report on performance against this direction in our Annual Reports. 

In December 2021, the Ministers responsible for the Guardians and other large Crown Financial Institutions (CFIs) issued a letter to the CFIs outlining expectations in relation to measuring, reducing and influencing the transition to zero carbon investment portfolios by 2050. A copy of that letter and our response can be found on our website.

The Guardians is an autonomous Crown entity, legally separate from the Government with an independent board. Our governance framework is designed to ensure that we operate at arms’ length from the Government (for example, Board members are required to have substantial expertise in investment management and are selected by an independent nominating committee). Consequently, we do not have privileged access to market sensitive information from the Government, nor seek to have the Government intervene on our behalf in competing with private entities. Investment decisions are made on commercial grounds.

Our codes of conduct for staff including contractors and the Board require that information only be used for proper purposes and clear protocols are in place for engagement with central and local government.

Exercise of ownership rights is covered in our Statement of Investment Policies, Standards and Procedures, which is published on our website (see link under our response to GAPP 19 which also discusses our approach with reference to our Sustainable Investment Framework).

We regard voting rights as important for maintaining shareholder oversight of portfolio company boards and corporate policies. Exercising these rights is therefore central to our sustainable investment approach and to meeting our obligations under our governing legislation.Our Global Voting Policy & Guidelines is available on our website and outlines the principles guiding our voting decisions. Our voting guidelines are based on national and international standards of good corporate governance.

We disclose all NZ Super Fund votes in respect of listed entities via a voting reporting platform. 

Our framework for identifying, assessing and managing enterprise risk is set out in our Risk Management Policy and Procedures. This Policy includes a Risk Appetite Statement which sets out the Board’s approach to risk the Guardians will take to achieve the strategic goals of the Guardians and the NZ Super Fund.

Our approach to managing investment risk is set out in our Direct and Externally Managed Investment Policy and Procedures; Derivatives Policy; Investment Risk Allocation Policy; Portfolio Completion and Internally Managed Securities Policy; and Statement of Investment Policies, Standards and Procedures (which are published on our website). Our investment implementation process (outlined in our Direct and Externally Managed Investments Policy) ensures that legal, operational, sustainable investment, reputational, finance, governance and tax risks are identified and managed appropriately. 

The Board receives regular reporting  on enterprise risks and investment risk (including reporting against investment constraints), ensuring oversight of both financial and non-financial exposures.

The Audit & Risk Committee supports the Board in monitoring the effectiveness of internal controls. It receives reports from management, internal audit, and external auditors, and oversees the Guardians’ internal audit function, which operates independently of operational management.

Our Annual Reports also include a dedicated section on Risk Management (within the Governance section).

The Guardians’ performance is periodically reviewed by an independent person appointed by the Minister of Finance. Refer to GAPP 19.

Overall investment performance for the NZ Super Fund is measured by the Guardians’ performance reporting software, PEARL. The Statement of Investment Policies, Standards and Procedures sets out the standards for performance reporting, and our Investment Valuation Policy establishes the approach taken to measure the fair value of all assets held by the NZ Super Fund. 

On an annual basis, we report: 

• performance of the NZ Super Fund relative to both our passive Reference Portfolio benchmark and New Zealand Treasury Bills
• value added to the Fund by active management;
• the external managers we have engaged (and terminated), including their strategies and asset classes relevant and funds under management as at 30 June; 
• our internal investment mandates; 
• our holdings in listed equities;
• our New Zealand external investment mandates and their underlying portfolio companies; 
• our direct investments, where the information is not commercially sensitive; and
• our performance expectations for the next financial year.

Our Annual Reports contain the first four reports. The next three reports are available on our website. Our annual Statement of Performance Expectations contains the final report. 

In our Statements of Intent we set out our equilibrium expectations of the Reference Portfolio as the basis for expected Fund returns over 1, 10 and 20 year periods.

On a quarterly basis we report to the New Zealand Minister of Finance, and to the Treasury:

• performance of the NZ Super Fund relative to benchmarks
• value added to the Fund by active management including a breakdown of the drivers of value add;
• Sharpe Ratio;
• Information Ratio;
• Tracking Error;
• Liquidity (Extreme Market Volatility) score;
• Value-at-Risk;
• maximum drawdowns;
• asset allocation;
• notable investment activities; and
• other contextual and operational activity of note.

Investment performance information since inception, and over the last one, five, 10 and 20 year periods, is updated on our website on a monthly basis.

As stated above, each year we measure and publish the carbon footprint of the NZ Super Fund’s portfolio based on its carbon emissions intensity and its exposure to fossil fuel reserves. The carbon footprint tracks our performance against our whole-of-Fund carbon reduction targets.

We self-assess our implementation of the Santiago Principles at least once every three years. Copies of each such self-assessment are available on our website. Since 2016 we have also engaged Ernst & Young Limited (EY) to provide an independent limited assurance report on each of our self-assessments. EY’s report is also available on our website.