The Annuitas-run National Provident Fund (NPF) saw returns about halved year-on-year but ended up about 6 per cent on average after costs for the 12 months to March 31.
According to the just-released NPF 2025 annual report, performance across the eight pension schemes in operation during the period ranged from 1.2 per cent to 9.1 per cent.
The eight defined benefit NPF funds – now down to seven after the meat industry scheme wound up at the end of March – all have different asset allocations based on actuarial considerations and member choices.
Louise Edwards, who replaced the long-serving Ed Schuck as NPF chair last July, told the roughly 11,500 members that schemes exposed to global equities “did particularly well” over the latest financial year.
Currently, the fund uses three managers for international shares, comprising two quantitative-style firms – the US-based Arrowstreet Capital and the Rotterdam-headquartered, Robeco – and the growth-focused T Rowe Price.
Robeco replaced Lazard on the offshore equities panel last September with Nikko Asset Management picking up a cash mandate and Russell Investments hired as a transition manager about the same time.
The NPF invests via a subset of the Annuitas-selected managers servicing the larger ($5 billion plus) Government Superannuation Fund.
Despite the solid investment returns, total funds in management for the combined schemes (aggregated in the Global Asset Trust) fell about $73 million year-on-year to just under $1.7 billion.
Established in the 1990s to manage government-associated liabilities of 16 defined benefit funds in sectors ranging from freezing works to flying, the NPF scheme number has shrunk over time with the pace of consolidation set to increase.
“Over the coming years, we anticipate that contributor numbers will continue to decline as members reach retirement age and elect to receive their entitlements as a pension or as a cash lump sum,” Edwards said. “This is likely to give rise to further rationalisation of the schemes, with members being consolidated into the larger schemes to minimise overall reporting and administration costs.”
The Global Asset Trust reported total expenses of almost $7.9 million for the year including a management/custodial fee of close to $7.3 million: Annuitas received approximately $2.3 million of the management fee to cover its services.
In a cost-saving measure, NPF also discontinued the practice of sending paper copies of annual reports to all members this year, opting for a digital-only supply.