PNG super fund dramatically outperforms Australian peers

Firmin Nanol, Port Moresby

Last Updated: Mon, 16 Feb 2009 23:44:00 +1100

Papua New Guinea's largest private sector superannuation fund NASFUND has declared more than $US27 million in profit for 2008, despite the global economic downturn.

Radio Australia's reporter in Port Moresby, Firmin Nanol, says NASFUND's 120,000 members have been credited with 8 per cent of the profit into their savings.

The fund's joint CEO Ian Tarutia says NASFUND's performance compares well against most super funds in Australia, which have been lost up to 24 per cent in returns to members.

"Last year when the financial global crisis, which started in America and then spread throughout the world, obviously it was going to have some effect on PNG, particularly for us as a super fund, on some of our investments that were listed offshore," Mr Tarutia said.

"But having said that, when we look at the performance of the superannuation industry in Australia for example, most super funds averaged a negative loss of 24 percent, and you compare that to what we've been able to give our members this year, then you can see that's some consolation."

Mr Tarutia says most of the super fund's profit for 2008 came from investments in the real estate industry, loans to businesses and the sale of shares in major local equities held by NASFUND.

However he says members cannot expect the same growth this year.

"We are forewarning that given the outlook globally, and its effect on our economy, we don't want to sound overly pessimistic, but we also want to be realistic, and say that given what's happening around the world, we know we are not 100 percent insulated from the happenings around the world," he said.

"The returns of yesteryear is not something we can look forward to this year."

Mr Tarutia says the fund is likely to see single-digit growth in 2009, and says a negative return is also potentially possible.

NASFUND is investing in PNG's booming building and construction industry, and Mr Tarutia says there will be some cushioning effects with returns from these investments, if the global financial crisis continues next year.

"We run a balanced fund model, so the saying where you don't put all your investments in one basket; the investments of NASFUND are spread throughout various types of investments," he said.

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