Legislation Expanding Investment Opportunities for Superannuation Fund Passes

"The bill removes a section in the original act that prohibited the fund from taking a controlling interest in an entity," said Nicola Willis.

Finance Minister Nicola Willis has announced the successful passage of the New Zealand Superannuation and Retirement Income (Controlling Interests) Amendment Bill, which passed its third reading in Parliament today. This new legislation grants the New Zealand Superannuation Fund broader investment opportunities.

"The bill removes a section in the original act that prohibited the fund from taking a controlling interest in an entity," said Nicola Willis. "This change reflects the fund’s growing maturity and will give its managers the flexibility needed to manage direct investments in line with global best practices."

Nicola Willis explained that the original New Zealand Superannuation and Retirement Income Act, enacted in 2001, limited the fund's exposure to direct investments, reflecting the fund's newness and the investment best practices of that time. However, after 20 years, the fund has demonstrated its capability to implement a sophisticated investment strategy effectively.

"Direct investment is now widely recognised as consistent with best-practice portfolio management, a perspective that has evolved since the fund was established," Willis noted. "The fund has proven its ability to successfully manage a complex investment strategy, making the previous prohibition unnecessary."

Despite the amendments, the fund's mandate remains unchanged; it is still required to invest on a prudent commercial basis.

"This legislation will allow the fund to leverage its intergenerational endowments and long-term horizon to access a wider pool of viable investment partners and opportunities, particularly within New Zealand," Willis added.

The amendments to the Act will come into force the day after the bill receives the Royal assent.