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Investment markets

2012 was a year where each sector except for the cash sector performed above their expected long-term average return. The returns for each of the Pools are shown at the bottom of the page.

The market performance for 2012 underpins a year which will see some very high returns being reported across the industry (superannuation and KiwiSaver in particular). The NZ share market was up 18.0% This was capital growth only. When you add in the dividends received, the total share market return was 25.9%. If you are on a PIR tax rate of 28%, that means a returns for the 12 months of 23.7% after-tax. In contrast, the return from cash for the same time period was 2.0% after-tax. So this was a year of significant recovery for those with exposure to the share markets. However, share market returns are volatile and you need to put 2012 into the context of the last 5 years. The 5-year after-tax market return (at 28% PIR) averaged just 0.3% p.a. In contrast, the 5-year after-tax cash return was 3.0% p.a. after-tax.

The high market returns translated into high SuperLife returns (after-tax and after-fees) of:

	Cash		NZ Shares
	Market	SuperLife	Market	SuperLife
1 year (%)	2.0%	2.8%	23.7%	37.0%
5 years (% pa)	3.0%	3.5%	0.3%	3.9%

 

Insurance premiums

Each year effective 1 April, the UniMed insurance premiums are reviewed. This year we expect the medical premiums to rise by about 6% on top of the normal age adjustment that applies. This reflects the general rise in medical costs, particularly surgical costs. Life and income-protection premium rates remain unchanged, other than the normal age adjustments. Individual members will be advised in March of the impact on them.

Statements

As a member, you can choose to receive your statements electronically and set the frequency (e.g. weekly, monthly etc.). Electronic statements are normally sent within 1 business day of the end of the period. It is a great way to stay informed. Also, all statements are automatically stored on the website and can be accessed at any time.

Legislative and regulation change

Over recent years, we have seen significant legislative and regulatory changes. 2013 will be no different. Currently before parliament is legislation that will rewrite the laws for registered superannuation schemes. It will also extend many of the recent compliance changes to KiwiSaver to also apply to registered superannuation schemes. We will also see the implementation of new rules that relate to the disclosure of the returns of KiwiSaver schemes. From July 2013, providers will be required to disclose returns on a standardised basis which should make comparisons between providers easier and more transparent.

Thinking about your retirement

If one of you new year's resolutions was to get your investments and retirement savings on track, our booklet Thinking about your retirement may help. It is one of the many guides available on the SuperLife website. While it may not be a best seller, it is a great summer read.

Investment seminars

The 2013 investment seminars throughout the country start in April. This year, the focus is on "improving the health of your savings and investments"  and incorporates a general investment market update. Details are on www.SuperLife.co.nz/seminars. The seminars are free and you can bring a friend or family member.

KiwiSaver

With just over 2 million people in KiwiSaver, now it is time for the other 1 million who are eligible to think about joining. KiwiSaver is simply about saving so that you have a better retirement. It can also be used as a way of saving to buy your first home.

It is attractive to save in KiwiSaver, relative to other investments, because of the government paid subsidies (an initial $1,000 and then up to $521 each year).

If you are one of the 1 million wo have not joined, check out the SuperLife website to find out the details and then take action. Remember, KiwiSaver is not restricted to employees. KiwiSaver is for employees, the self-employed, stay-home parents, beneficiaries and children. The main requirements are that you are under 65 when you join, are living in New Zealand and have the right to live here permanently.

After-tax returns to 31 December 2012 - SuperLife superannuation

All returns quoted are after-tax at the top tax rate and after investment fees. An individual's returns may vary from the above due to cash flows and different tax rates. Past performance does not indicate likely future performance.

Investment strategy - Managed³⁰ and Managed⁶⁰ pools