Seafarers annual report 2015

Issue No 43

Since 1972

SEAFARERS RETIREMENT

FINANCIAL TIMES Annual Report of the Seafarers Retirement Fund and SRF KiwiSaver Scheme.

Fund Performance Tama Willis and Rebekah Swan

For the year ended 31 March 2015

Garry Parsloe retires after 35 years as a trustee page 10

Worldwide edition

STRONG PERFORMANCE CONTINUES GOLDEN WEATHER RUN The Seafarers Retirement Fund (SRF) today announced another strong performance with SRF chairman David Scott highlighting the performances of its commercial property in Auckland, the international share fund and the developing market fund.

“It’s another pleasing performance and has seen consistent growth since we came out of the Global Financial Crisis (GFC) six years ago.

“It’s always hard to predict the future but the economic environment that our members are seeing is new to many, with low to zero inflation and low interest rates. The last time this occurred was in the 1950s and 60s,” Mr Scott said.

About $62 million is currently invested in conservative to moderate risk investments.

Mr Scott said the Estee Lauder property in Auckland was riding the wave of strong commercial rentals and was the star performer over both the one-year and the three-year returns.

SFR had recently re-signed the tenancy with Estee Lauder for a further six-year term.

“We are seeing growth in the Auckland commercial market for two reasons, the growth in rentals and the decrease in interest rates.

“This has driven up the valuation of commercial property,” he said.

Investment Sector Returns The SRF revised investment strategy has been going for three years and this is providing balance, reducing risk and smoothing returns.

Indexed benchmarks are set for all investment managers and four of the AMPC products

12.79% SRF KiwiSaver Scheme 2015

5 year return 6.60% SRF KiwiSaver Scheme

13.42% Market Linked 2015

achieved the benchmark - New Zealand bonds, cash, international equities and emerging markets equities while two missed their targets, Australasian equities and International bonds by small amounts.

5 year return 7.51% Market Linked

Devon reached its target for Australasian shares.

The alternative assets class investments Nikko and Pathfinder, which are used to protect the fund in tough times, met their benchmarks.

Commenting on the performance of AMPC, Representative Rebekah Swan said the world’s major economies continue to be best described as mixed with the US, UK and New Zealand the standout performers.

“The outlook for the global economy continues to be described as uneven. We expect global growth in 2015 to be at the same level as 2014, although the mix is different with stronger growth in developed economies but lower growth among the emerging economies,” she said.

Tama Willis of Devon Funds Management, the Australasian share manager fund, said the most positive performers of their fund were Resmed (+98%), Vista (+87%), Slater & Gordon (+67%), Macquarie Group (+37%) and CSL (+34.4%).

Although the Australian economic headlines are negative, a recent visit by Mr Willis to Australia to visit corporates revealed a number of positives emerging including; lower interest rates, a strong housing market and relatively resilient consumer demand.

See pages 3-4 for detailed reports by the investment managers.

2.71% Conservative Fund 2015

5 year return 2.49% Conservative Fund

Going forward, Mr Scott says the trustees don’t see too many changes to the SRF investment strategy, although they will be meeting shortly to review it.

“As members, you won’t see any dramatic changes; if any, they will be very subtle.”

Having enjoyed the “golden weather” since the GFC, Mr Scott warns members to expect “the unusual” to return to the world financial markets at some stage in the future.

CO N T E N T S Chairman’s Report Devon Funds Management Pathfinder Commodity Fund AMP Capital Estee Lauder Property Nikko AM Wholesale Multi-Strategy Fund Financial Reports Trustee Report Returns over the last 26 years SIPO Benchmarks Trustees’ Certificates

02 03 03 04 05 05 06-07 08 09 09 09

Garry Parsloe Retires 10 Unallocated Funds 10 7 Habits of Investors 10 Interim Rates 11 SRF Membership 11 SRF KiwiSaver Scheme Membership 11 Complaints Procedure 12 Long-Term Cost and Price Movements 12 Merger Proposal 12 Directory 12

HIGHLIGHTS OF SFR Estee Lauder SRF Market Linked Fund Return of 13.42% SRF KiwiSaver Scheme Return of 12.79% SRF Conservative Fund return of 2.71% During the year, the trustees met six times with five meetings in Wellington and a meeting in Auckland, which included a site visit of the Estee Lauder property, which recently underwent a refurbishment.

Other key initiatives undertaken during the year for the benefit of members were the introduction of formalised procedures for the trustees to ensure that things are handled correctly and quickly.

The investment managers also formally presented to the trustees at least twice during the year.

Mr Scott said the major loss during the year was the retirement of Garry Parsloe as a trustee.

He had vast experience and knowledge relating to the SRF; however former trustee Barry Millington will ably replace him.

Since 1972

02

DEVON HITS TARGET FOR AUSTRALASIAN SHARES DEVON FUNDS

“The investment in Pathfinder a commodities fund will be revisited by the trustees in the coming months.”

“The expected growth for the coming year is 3.1% followed by 3.2%.”

MANAGEMENT

FROM THE CHAIR: DAVID SCOTT

Australasian Shares Pre-tax returns 25

Report by Tama Willis of Devon Funds Management

The SRF returns are a product of the global and New Zealand investment markets returns.

We have an economic environment where inflation is low and going lower, and interest rates are the same. In the USA we have steady GDP growth at 2.4%, where the recovery is continuing. In Europe we have the two extremes Germany, where the economy is booming and Greece, where they are teetering on debt default. The balance of Europe is still struggling to

Investment Sector Returns

This investment strategy has been in place now for three years and by having different investment sectors it reduces risk and smooths returns. All of the SRF investment managers are reviewed over a three year time-frame against a benchmark that was set at the time of appointment. AMPC reached its benchmark for New Zealand bonds, cash, international equities and emerging markets equities, while it missed its target for international bonds and New Zealand shares by small amounts. Devon made its target for its Australasian shares.

Our two alternative assets class investment Nikko and Pathfinder, which were selected as investments to protect the fund when times got tough, were not needed. However, the investment in Pathfinder, a commodities fund, will be revisited by the trustees in the coming months.

Our direct property investment with Estee Lauder as a tenant was the star performer over both the one-year and the three-year returns.

The major investment returns were from equities and property and this looks as though it will continue however at a much lower rate.

Trustees Year in Review

During the year the trustees held six meetings, five in Wellington and one in Auckland.

The Auckland one was used as an opportunity to inspect the Estee Lauder property after its refurbishment. We introduced a formalised complaints procedure for members to follow if they are unhappy about something related to the SRF. We had all the investment managers give the trustees presentations and we took this opportunity to question them about any issues.

“The major investment returns were from equities and property and this looks as though it will continue however at a much lower rate.”

The trustees suffered a major loss with the retirement of Garry Parsloe, however he has been replaced by a former trustee, Barry Millington. Work has started on getting ready for the changes required under the Financial Markets Conduct Act 2013 which has to be completed by 1 December 2016.

Last year I made comment about contributions received from union members without the completion of the required SRF joining paperwork. This issue has been reduced by some excellent detective work by Aon Hewitt.

Outlook for Current Year

The last major investment event was the Global Financial Crisis six years ago and this is firmly in the background now. Returns have been excellent in five of the last six years however the investment market has changed from the past. We have entered an environment of very low inflation and interest rates, so getting returns from bonds will be more difficult and there will be greater risk as bond returns will not be increased by falling interest rates.

We have experienced 40 years of inflation where central banks increased or decreased interest rates to control inflation. This is not available to them now as increasing interest rates will choke off economic growth as there is virtually no inflation.

In New Zealand the Reserve Bank wants to stem the increase in Auckland house prices;

“Work has started on getting ready for the changes required under the Financial Markets Conduct Act 2013 that has to be completed by 1 December 2016.”

however, if it increases interest rates it will hurt all other borrowers and also reduce economic activity so it has a very difficult problem to resolve. It has chosen to increase investment purchasers deposits required to 30% to help reduce this increase in Auckland house prices.

With all of this in mind I expect to have mid-single digit returns for the SRF Market Linked and SRF KiwiSaver Scheme and low returns for the SRF Conservative Fund.

Acknowledgements

The successful running of the Seafarers Retirement Fund is the combination of the efforts of a large number of people: Aon Hewitt’s Kim Basher, John Hammond and Guy Fisher; Rebekka Swan from AMPC; James Wesley from Nikko; Tama Willis from Devon; and Paul Brownsey and John Berry from Pathfinder.

Finally, special thanks to my fellow trustees Andro Besich, Mike Clark, Alan Windsor, Paul Nicholas and the recently retired Garry Parsloe.

We met all of the challenges last year and I am sure we will meet all the ones for the coming year.

TOUGH YEAR FOR COMMODITIES Commodities have had a tough year. Against this backdrop, our fund has done relatively well to remain (nearly) flat – it fell 1.1% (after fees) in the 12 months to 31 March 2015.

Although the return was negative, it compares favourably to the hefty 27.0% fall for the wider commodity market (measured by the Bloomberg Commodity Index).

Medium-term returns provide a similar pattern with the fund down 3.4% per annum over the three years to 31 March 2015, while the Bloomberg Commodity Index was down 11.5% per annum. The single largest reason for the difference between fund and commodity

market returns has been the success of the fund’s allocation between commodities and cash.

For example the fund moved to 100% cash in September 2014 when the oil price was US$95 a barrel (it later plummeted to a low of US$44).

Commodity markets have been unsettled since the onset of the global financial crisis.

We do hold some optimism for prices to rebound – drilling of new oil wells in the US has recently plummeted (signalling a coming supply reduction) and in other markets, corn and wheat appear significantly oversold. Strength in commodity markets ultimately requires stronger growth and inflation in the global economy.

3 year

%

5

18.45%

0

1 year

8.85%

15.84%

3 year Benchmark

10

Performance

The most positive contributors to the relative performance of the portfolio during the year were Resmed (+98%), Vista (+87%), Slater & Gordon (+67%), Macquarie Group (+37%) and CSL (+34.4%). The key detractors were

1 year

15

7.78%

Benchmark – ASX 200 Index in NZD

PATHFINDER COMMODITY FUND

Commodity Fund

Manager achieved 3 year objective

Pre-tax return 15 10 5

%

0

1 year

-1.1%

1 year

3 year

-27.01%

-3.4%

3 year

Benchmark

This year we have seen after tax and expenses returns of 13.42% for the SRF Market Linked Fund, 12.79% for the SRF KiwiSaver Scheme and 2.71% for the SRF Conservative Fund. These returns are very good; however, when you look at the 5 year returns; 7.51%, 6.60% and 2.49% respectively, you can see that we have had a period of sustained good real returns, being what members want to enhance their savings for retirement.

All in all this is a mixed picture, however investment returns normally follow positive economic data.

This year remains a challenging one for Australia as China’s reform focus is seeing the market finally accept a lower rate of growth and China exposed commodity markets remain under significant pressure. However, while many of the Australian economic headlines are currently negative, this actually creates opportunities for bottom-up stock pickers like Devon. We recently spent a week in Australia visiting corporates and saw a number of positives emerging, including lower interest rates, a strong housing market and a relatively resilient consumer. We continue to find new ideas for the portfolio.

Performance

Investment Returns and Environment

New Zealand has had GDP growth of 3.5%, the strongest since 2007, and this is on the back of residential construction, population growth, low interest rates and solid employment growth coupled with strong consumption. The expected growth for the coming year is 3.1% followed by 3.2%. The only downside is the strong New Zealand dollar; however this is expected to fall.

20

Woolworths (-13.5%), Oil Search (-13.4%) and Rio Tinto (-6%).

Benchmark

The last time New Zealand had this mix was during the 1950’s to 60’s. This changes the investment environment for the SRF, where returns can be earned from, and where risks are likely to be in different asset classes. On the international investment scene we have seen quantitative easing stopping and starting in various countries, and the financial remnants of the GFC still being addressed in various countries, including Greece.

The Devon Australian Fund returned 18.45% (gross) over the 12 months to 31 March 2015 compared to 8.85% for the ASX 200 index in NZD terms. Over three years, the Fund returned 15.84% p.a. (gross) compared to 7.78% for the ASX 200 index in NZD terms.

The NZ dollar appreciated by 5% against the Australian dollar over 12 months and 24% over three years, which impacted the total return of the fund. The fund remains unhedged so will benefit from any future weakness in the cross rate.

Manager achieved 3 year objective

Benchmark

When we look back in a few years at the last six years following the Global Financial Crisis (GFC) they will be considered the “golden weather” with respect to investment returns for the Seafarers Retirement Fund. We have entered a new economic environment for many members.

This environment has low to zero inflation and low interest rates.

record 0.9% GDP growth, with the UK recording growth of 2.6%. China recorded growth of 7.4%, the same as India. In Australia, they are transitioning from the end of the mining investment boom. They have experienced GDP growth of 2.25% with it expected to pick up to 2.5% in 2015.

Performance

Dear members

Performance

“New Zealand has had GDP growth of 3.5%, the strongest since 2007.”

03

-11.5%

-5

Regards

-10

David M Scott Chairman.

-15

-20

“I expect to have mid-single digit returns for the SRF Market Linked and SRF KiwiSaver Scheme and low returns for the SRF Conservative fund.”

-25

-30

Benchmark – Bloomberg Commodities Index Paul Brownsey and John Berry of Pathfinder

04

AUCKLAND PROPERTY BOOM GOOD FOR SRF

AMP CAPITAL ACHIEVES 4 OUT OF 6 TARGETS

Fixed income returns were high for the year, with global bonds continuing to generate positive returns in New Zealand dollar hedged terms over the period. Yields in the major markets declined as the impact of a stagnant Eurozone economy and geopolitical tensions overshadowed the strong recovery underway in the US and the UK.

10

4 2

7.58%

0

10.37%

9.38%

3 year

3 year

5.87%

Benchmark

Benchmark

Performance 7.29%

6

1 year

4.60%

Benchmark – ANZ Govt Bond

Benchmark – Barclays Captl Agg Hedged

Strategic NZ Shares

Emerging International Market Shares 25

25

20

20

1 year

3 year

3 year

Benchmark

11.43%

%

3 year

1 year

Performance

0

10.79%

Benchmark

2

Performance

4

3 year

8

Manager achieved 3 year objective

Performance

Manager did not achieve 3 year objective

Benchmark

1 year

Performance

1 year

8 6

Report by Rebekah Swan of AMP Capital Investors

12

12

%

ESTEE LAUDER PROPERTY

NZ Fixed Interest

Hedged Global Fixed Interest 10

The outlook for the global economy continues to be best described as “uneven”. We expect global growth at the same level as 2014, although the mix is different with stronger growth in developed economies but lower growth among the emerging economies. Global shares should deliver solid returns in 2015 allowing for temporary bouts of turbulence. However, defensive investments such as bonds will remain under pressure as investors continue to favour more growth-oriented opportunities.

1 year

18.44%

16.22%

3 year Benchmark

0

4.01%

NZ Cash

• the location was excellent with close access to the motorway as well as other arterial routes

• a modern well designed building in an excellent area, with other similar buildings close by

• a good lease for a landlord with a reasonable term remaining.

% 3 year

4%

3.58%

3.65%

2.99%

Benchmark

Performance

3 year

Benchmark

1 year

Performance

3

20

Benchmark – ANZ 90 Day Bank Bill

15

10

1 year

1 year

5

0

23.08%

22.69%

30.0% 25.0%

We purchased the Estee Lauder tenanted building 7.7 years ago, and since then we have negotiated rental increases and renewal of the lease for six years from last year. We have refurbished the building to meet Estee Lauder’s expectations and the trustee’s policy of always maintaining assets to a high standard.

20.0%

Last year our independent valuation of the premises increased from $3.70 m to $4.28 m, a 16% increase when added to the rental income of $206k this resulted in a total pretax return for the year of 25%.

Over the 7.7 years that we have owned the building, it has returned 11% pa against the Aon property index benchmark of 3% pa. It should be noted that this ownership period includes the global financial crisis when all returns were substantially reduced.

10.0% 5%

0 1 year

1 year

15.8%

Benchmark – MSCI Unhedged

15.6%

3 year

risk diversification, relatively low volatility and a low correlation with traditional equity and fixed-income markets. The Fund’s exposure is generally around 15% to emerging markets, 45% in US and Canada and 15% in Europe.

Manager achieved 3 year objective

8 6 4 2 0

1 year

1 year

8.24%

6.0%

10.67%

5 year

8 year

Nikko Offers Strong Opportunities

12 10

3 year

Benchmark – Aon Property Index

Pre-tax returns

% 1 year

Manager achieved 3 year objective

15.0%

The two main reasons for the substantial increase in the premises value are increasing rentals in the area, and declining capitalization rates or investors’ expected returns. Both of these increase the premises’ value to an investor.

Manager achieved 3 year objective

Benchmark

Manager achieved 3 year objective

Estee Lauder property pre-tax returns

21.99%

Performance

1 year

0

25

4

1

21.56%

• a good tenant with a rental guarantee from the parent company

Passive International Equities

5

2

18.70%

SRF purchased the Estee Lauder Property in 2006

NIKKO AM WHOLESALE MULTI-STRATEGY FUND

Benchmark – NZX Portfolio Composite Index

Benchmark – Index Emerging Markets

%

21.76%

Benchmark

5

3 year

6.52%

Performance

10

Benchmark

0

%

Performance

5

Manager achieved 3 year objective

1 year

Performance

10

15

Benchmark

%

1 year

Performance

15

Manager did not achieve 3 year objective

The trustees in late 2006 started to look for a property for the SRF to own as an investment. At this time there were plenty on the market, however good quality property was scarce. This property came up and after a thorough examination a decision was made to purchase it. The main reasons being:

3 year

Benchmark

Domestically, the New Zealand economy continued to perform strongly, with annual growth in the 2014 calendar year recording the strongest growth since 2007. Growth was supported by strong net migration, solid employment and construction activity. However, this growth was tempered by the strong New Zealand dollar, fiscal drag and the effect of the drought and lower dairy prices.

Performance

Economic conditions among the world’s major economies continue to be best described as “mixed”. From an economic growth perspective the US, the UK and New Zealand were the standout performers over the year.

The New Zealand sharemarket, as measured by the NZX 50 index, produced strong returns for the March year. The New Zealand market’s performance was boosted by ongoing strength in net migration and construction activity, in addition to a lower exposure to declining oil and mineral exploration companies than Australia and other markets.

Benchmark

The global economy picked up momentum over the year, led by developed market economies.

The actions of central banks around the world were a major influence on global markets. The US Federal Reserve (the Fed) announced the end of quantitative easing in October, while the European Central Bank recently commenced its asset purchase programme. However, volatility was a key theme, driven by geopolitical concerns (most notably Ukraine and Syria) along with uncertainty as to when the Fed would start to raise interest rates. A sharp drop in the price of oil was also a key development during the year.

New Zealand bonds also performed strongly as yields rallied.

However, while conditions continued to slowly improve in Japan and the Eurozone, their growth performance remained well below that of the stronger economies.

Performance

Investment commentary

05

5.55%

Benchmark 90 Day Bank Bill rate + 2.5%

Reported by James Wesley

Performance

The Nikko AM Wholesale Multistrategy Fund invests into JP Morgan Multi-Strategy II Ltd. The latter integrates five hedge fund strategies with around 40 different managers into one fund to generate capital appreciation over the long term with

For the year ended 31 March 2015, the Nikko AM Wholesale Multi-strategy Fund was up 8.24%.

The gross average annual return for the last three years was 10.67% pa and five years was 10.15% pa.

The largest contribution over the year came from the equities managers – Long/short Equities and Relative Value strategy managers. Opportunistic/ macro and Credit were small positive contributors over the year. Within the Long/Short Equities strategy, healthcare was a strong contributor as industry consolidation continued

and many companies rallied on strong earnings and guidance. Technology stocks were also higher on stronger earnings and guidance. In Q4 2014 and Q1 2015, some volatility returned to equity markets that created a more favourable environment for selected managers in the Relative Value strategy to add value. Falling oil and gas prices in 2014 provided an opportunity for a commodity managers in the Relative Value to add value, with mixed returns from other managers in this strategy.

The Nikko AM Wholesale Multistrategy Fund offers some strong opportunities to add value to your fund from places that are often inaccessible to investors in traditional asset classes.

The aim is to continue to add value while at the same time reduce the risk of your overall portfolio.

06

Performance Report Report of the independent auditor on the summary financial statements to the members of Seafarers KiwiSaver Scheme.

The accompanying summary financial statements of Seafarers Kiwisaver Scheme (the ‘Scheme’) on pages 6 to 7, which comprise the financial summary statement of net assets as at 31 March 2015, and the summary statement of changes in net assets and summary statement of cash flows for the year then ended, and related notes, are derived from the audited financial statements of the Scheme for the year ended 31 March 2015. We expressed an unmodified audit opinion on those financial statements in our report dated 7 July 2015.

The summary financial statements do not contain all the disclosures required for full financial statements under New Zealand Equivalents to International Financial Reporting Standards, International Financial Reporting Standards and generally accepted accounting practice in New Zealand. Reading the summary financial statements, therefore, is not a substitute for reading the audited financial statements of the Scheme.

This report is made solely to the Scheme’s members, as a body, for the purpose of expressing an opinion on the summary financial statements for the year ended 31 March 2015. Our audit has been undertaken so that we might state to the Scheme’s members those matters we are required to state to them in an auditor’s report on summary financial statements and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Scheme’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Trustees’ Responsibility for the Summary Financial Statements The Trustees are responsible for the preparation of a summary of the audited financial statements, in accordance with FRS-43: Summary Financial Statements.

Auditor’s Responsibility Our responsibility is to express an opinion on the summary financial statements based on our procedures, which were conducted in accordance with International Standards on Auditing (New Zealand) (ISA (NZ)) 810: Engagements to Report on Summary Financial Statements.

Other than in our capacity as auditor, we have no relationship with or interests in Seafarers Kiwisaver Scheme.

Opinion In our opinion, the summary financial statements derived from the audited financial statements of Seafarers KiwiSaver Scheme for the year ended 31 March 2015 are consistent, in all material respects, with those financial statements, in accordance with FRS-43: Summary Financial Statements.

Summary Financial Statements for 2014/2015 SRF KIWISAVER SCHEME 2011 2012 2013 $ $ $ 1,696 14,139 ( 783) 15,052

( 636) ( 636) 14,416 ( 1,204) 13,212

65,643 30,462 28,831 52,443 ( 2,055) ( 3,594) 171,730 184,942

( 183) ( 183)

( 460) ( 3,344) ( 1,622) ( 69) ( 92) ( 610) ( 6,197) ( 6,380) ( 17) ( 6,397)

120,222 51,991 40,991 19,516 ( 3,183) ( 935) 228,602 222,205

67,250 67,250

( 670) ( 3,475) ( 1,541) ( 149) ( 23) ( 987) ( 6,845) 60,405 60,405

105,811 42,798 24,149 81,711 ( 3,677) ( 24,855) 225,937 286,342

2014 $ 75,277 75,277

(941) (4,945) (1,817) (143) (145) (1,524) (9,515) 65,762 3,754 69,516

181,316 82,670 25,975 247,291 (3,891) (155,212) 378,149 447,665

185,938 185,938

Statement of Changes in Net Assets for the Year Ended 31 March 2015 Investment Income Interest Rental Income Change in Net Market Values Less Investment Management Fees Net Investment Revenue

(1,199) (4,599) (1,980) (243) (218) (1,792) (10,031) 175,907 4,175 180,082

Operating Expenses Secretarial Fees Audit Fees Taxation Fees Trustees Expenses Trustee Liability Insurance Other Expenses Total Operating Expenses Net Income before Tax Income Tax Expense Net Income after Tax

2015 $

191,328 109,600 34,119 160,393 (4,881) (238,929) 251,630 431,712

Membership Activities Members’ Contributions Employers’ Contributions Crown Contributions Unallocated Contributions Transfers in Administration Fees Benefits Paid Net Life Insurance Transactions Net Membership Activities Overall Investment & Member Income

SEAFARERS SEAFARERS RETIREMENT RETIREMENT FUND FUND 2014 2015 $ $ 500,649 205,581 6,834,128 (94,304) 7,446,054

248,347 212,369 3,611,418 (96,934) 3,975,200

(46,539) (18,401) (7,924) (9,437) (10,218) (143,751) (236,270) 7,209,784 (562,744) 6,647,040

(46,797) (19,780) (7,268) (7,114) (9,515) (108,649) (199,123) 3,776,077 (359,017) 3,417,060

2,123,884 2,815,089 8,455 (60,605) (5,610,585) (22,605) (746,367) 5,900,673

2,312,618 2,959,972 81,077 (59,868) (2,692,028) (21,950) 2,579,821 5,996,881

07

Performance Report Report of the independent auditor on the summary financial statements to the members of Seafarers Retirement Fund.

The accompanying summary financial statements of Seafarers Retirement Fund (the ‘Fund’) on pages 6 to 7, which comprise the summary statement of net assets as at 31 March 2015, and the summary statement of changes in net assets and summary statement of cash flows for the year then ended, and related notes, are derived from the audited financial statements of the Fund for the year ended 31 March 2015. We expressed an unmodified audit opinion on those financial statements in our report dated 7 July 2015.

The summary financial statements do not contain all the disclosures required for full financial statements under New Zealand Equivalents to International Financial Reporting Standards, International Financial Reporting Standards and generally accepted accounting practice in New Zealand. Reading the summary financial statements, therefore, is not a substitute for reading the audited financial statements of the Fund.

This report is made solely to the Fund’s members, as a body, for the purpose of expressing an opinion on the summary financial statements for the year ended 31 March 2015. Our audit has been undertaken so that we might state to the Fund’s members those matters we are required to state to them in an auditor’s report on summary financial statements and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Fund’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Trustees’ Responsibility for the Summary Financial Statements The Trustees are responsible for the preparation of a summary of the audited financial statements, in accordance with FRS-43: Summary Financial Statements.

Auditor’s Responsibility

Our responsibility is to express an opinion on the summary financial statements based on our procedures, which were conducted in accordance with International Standards on Auditing (New Zealand) (ISA (NZ)) 810: Engagements to Report on Summary Financial Statements.

Other than in our capacity as auditor, we have no relationship with or interests in Seafarers Retirement Fund Opinion

In our opinion, the summary financial statements derived from the audited financial statements of Seafarers Retirement Fund for the year ended 31 March 2015 are consistent, in all material respects, with those financial statements, in accordance with FRS-43: Summary Financial Statements.

Statement of Net Assets as at 31 March 2015 Chartered Accountants 7 July 2015

Wellington, New Zealand This audit report relates to the summary financial statements of SRF KiwiSaver Scheme for the year ended 31 March 2015 included on SRF KiwiSaver Scheme’s website. The entity’s governing body is responsible for the maintenance and integrity of the entity’s website. We have not been engaged to report on the integrity of the entity’s website. We accept no responsibility for any changes that may have occurred to the summary financial statements since they were initially presented on the website. The audit report refers only to the summary financial statements named above. It does not provide an opinion on any other information which may have been hyperlinked to/from these summary financial statements. If readers of this report are concerned with the inherent risks arising from electronic data communication they should refer to the published hard copy of the audited summary financial statements and related audit report dated 31 March 2015 to confirm the information included in the audited summary financial statements presented on this website. Legislation in New Zealand governing the preparation and dissemination of financial statements and summary financial statements may differ from legislation in other jurisdictions.

Disclosures – SRF KiwiSaver Scheme

In respect of the SRF KiwiSaver Scheme, the following disclosures are made: The promoter of the Scheme is the Maritime Union of New Zealand (MUNZ) whose elected officers/executives include Joe Fleetwood, Carl Findlay and Ray Fife. There have been no changes to the terms of the offer of interest in the Scheme.

• There has been no change of promoter.

• The prospectus, financial statements and other documents in respect of the Scheme are filed on a public register at the Companies Office of the Ministry of Business, Innovation and Employment. These are available for public inspection at http://www.business.govt.nz/ companies. Look under “Search Other Registers” for a copy of the most recent prospectus.

Membership Statistics – SRF KiwiSaver Scheme Number of contributing members on 1 April 2014 55 Total new entries/restarting contributions 26 Total Exits/ceasing contributions -25 Number of members on section 104 contribution holidays 3 Number of other non-contributing members 18 Number of members on 31 March 2015 77

Direct & Indirect Fees – SRF KiwiSaver Scheme Direct Indirect Trustee - Administration Manager $4,881 Manager - Investment Managers - Promoters - Other Persons * - $10,031

* Auditor, tax agent, compliance etc.

SRF KiwiSaver Scheme benefits paid during year expenses are those deducted directly from members’ accounts.

Transfers to other KiwiSaver schemes (2) $9,414 Direct Indirect expenses are those charged through the Scheme.

Retirements (6) $159,015 Retirement Partial Withdrawal (2) $70,500 SRF KiwiSaver Scheme Total: $238,939 Total member accumulations at 31 March 2015 $1,718,059 (relating to 77 members).

Related Parties: SRF KiwiSaver Scheme

The Scheme holds no investments in any of the employer companies or any of its related parties and during the period had no related party transactions, except for employer contributions of $109,600 (2014: $82,670). The Scheme pays secretarial fees to the Trustee and reimburses the Trustees’ travel costs, etc. During the year, the secretarial fee charged to the Scheme was $1,199 (2014: $941) and the cost reimbursed to the Trustee was $243 (2014: $143). Trustees who are members of the Scheme contribute on the same basis and have the same rights as other members of the Scheme.

318,144 12,219 330,363

549,746 8,091 557,837

844,844 113 844,957

1,288,177 3,914 1,292,091

1,718,134 8,230 1,726,364

Investment assets Other assets Total Assets

63,125,204 515,730 63,640,934

57,028,065 512,349 57,540,414

228 330,135

5,497 552,340

6,275 838,682

5,744 1,286,347

8,305 1,718,059

Liabilities Net Assets Available to Pay Benefits

586,552 63,054,382

386,705 57,153,709

23,425,264 39,574,027 54,068 1,023 63,054,382

20,968,271 36,065,131 118,777 1,530 57,153,709

330,135 330,135 330,135

552,340 552,340 552,340

838,682 838,682 838,682

1,286,347 1,286,347 1,286,347

1,718,059 1,718,059 1,718,059

Represented by liability for accrued benefits: Members’ Account Employers’ Account Unclaimed Contributions Reserve Account Vested Benefits *

55,320,503

50,551,806

12,202 227,674 ( 231,785) 8,091

8,091 219,757 ( 227,848) -

368,056 (368,056) -

244,019 (244,019) -

Opening cash on hand Cash flows from operating activities Cash flows from investing activities Closing Cash on Hand

280,130 (720,469) 622,000 181,661

44,379 2,565,751 (2,330,000) 280,130

Notes to Summary Financial Statements • The summary financial statements have been extracted from the full financial statements for the year ended 31 March 2015, which have been audited and on which an unmodified opinion has been issued and which were authorised for issue by the Trustees on 7 July 2015.

• These Summary Financial Statements for both the SRF KiwiSaver Scheme and SRF were authorised on 7 July 2015 by the Trustees.

• The summary financial statements cannot be expected to provide as complete an understanding as provided by the full financial statements of the financial performance, position and cash flows of the entities.

• Any member who wishes to receive (at no cost) full financial statements, the Auditors’ report, an estimate of the member’s benefits, or a copy of the latest prospectus relating to the scheme, should contact the Fund administrator, Aon Hewitt, details on page 12.

• The entities are profit-oriented and the full financial statements have been prepared in accordance with NZGAAP and New Zealand equivalents to International Financial Reporting Standards (NZIFRS). The entities have made explicit and unreserved statements of compliance with

7 July 2015

Wellington, New Zealand This audit report relates to the summary financial statements of Seafarers Retirement Fund for the year ended 31 March 2015 included on Seafarers Retirement Fund’s website. The entity’s governing body is responsible for the maintenance and integrity of the entity’s website. We have not been engaged to report on the integrity of the entity’s website. We accept no responsibility for any changes that may have occurred to the summary financial statements since they were initially presented on the website.

The audit report refers only to the summary financial statements named above. It does not provide an opinion on any other information which may have been hyper-linked to/from these summary financial statements. If readers of this report are concerned with the inherent risks arising from electronic data communication, they should refer to the published hard copy of the audited summary financial statements and related audit report dated 31 March 2015 to confirm the information included in the audited summary financial statements presented on this website. Legislation in New Zealand governing the preparation and dissemination of financial statements and summary financial statements may differ from legislation in other jurisdictions.

Related Parties: Seafarers Retirement Fund

Statement of Cash flows for the year ended 31 March 2015 11,536 172,906 ( 172,240) 12,202

Chartered Accountants

NZIFRS in note 2 of their full financial statements. In respect of the SRF KiwiSaver Scheme, the summary financial statements have been prepared in compliance with Financial Reporting Standard No.43 - Summary Financial Statements, and comply with the requirements of Clause 5 of Schedule 6 of the Securities Regulations 2009. In respect of the SRF, the summary financial statements have been prepared in compliance with Financial Reporting Standard No.43 - Summary Financial Statements.

• All figures in the Summary Financial Statements are in New Zealand dollars and have been rounded to the nearest dollar.

• Note that, in respect of the SRF KiwiSaver Scheme, in 2011, operating expenses were not broken down into their components, because they were deducted from investment returns. From 2012, the accounting policy changed.

The Fund holds no investments in any of the employer companies or any of its related parties and during the period had no related party transactions except for the receipt of employer contributions of $2,815,089 (2014: $2,959,972).

The Fund pays secretarial fees to the Trustee, trustee liability insurance and reimburses the Trustees’ travel costs etc. During the year, the Fund was charged with secretarial fees of $46,539 (2014: $46,797) and trustee liability insurance of $10,218 (2014: $9,515) while costs reimbursed to the Trustee were $9,437 (2014: $7,114).

Trustees who are members of the Fund contribute on the same basis and have the same rights as other members of the Fund.

Seafarers Retirement Fund Nominees Limited is the nominee company that holds the property on behalf of the Fund. The two directors of the company are also Trustees of the Fund.

The Fund comprises the Market Linked Investment Fund and the Cash Accumulation Investment Fund. The financial statements have been prepared at the fund level as the liabilities of the investment funds are not limited to the assets of each investment fund.

Therefore, assets of one investment fund could be used to meet the liabilities of another.

SRF KiwiSaver Scheme’s only investment is in the Market-Linked Fund.

The SRF KiwiSaver Scheme’s gain/(loss) is based on the return declared by the SRF. The investment holdings of the SRF KiwiSaver Scheme are a result of the contributions received and units redeemed on investments within the SRF in addition to the gains/ (losses) received on these investments.

Expenses of the SRF KiwiSaver Scheme comprise of fees exclusively incurred by the SRF KiwiSaver Scheme and fees jointly incurred with SRF. The administration, audit and tax fees are charged directly to the SRF KiwiSaver Scheme. All other expenses are jointly incurred with SRF. These other expenses are split between the SRF KiwiSaver Scheme and the SRF in proportion to the asset holdings as at balance date.

Issue No 61

09

Returns over the last 26 years

Annual returns

Returns credited to member’s accounts for the Market Linked option over the last 26 years

5 year running average

20.00%

15.00%

Trustees from left: Andro Besich, David Scott, Paul Nicholas, Alan Windsor and Mike Clark.

The Trustees Reflect

-10.0%

-15.00%

Statement of Investment Policies & Objectives (SIPO)

Conservative Fund

Market-linked and SRF KiwiSaver Scheme

SIPO: A return net of fees and tax that is not negative for1one year year

SIPO: A 5-yr return, net of fees and tax, of at least 3% above rate of inflation (1.9%)

6

4

2

0

7.51%

SIPO achieved 5 year objective

5 year year 1

4.9%

SIPO achieved 5 year objective

5 year 5 year

6.60%

4.9%

Benchmark index 3% + Annual CPI

Paul Nicholas

It is pleasing to note another good result for the fund for the last year and this has seen a continuation of this golden period, which has run for the last six years. As trustees we hope that the fund allocations that we have made will continue to provide a balanced return for members.

Seafarers Retirement Fund Trustees’ Certificate

The Financial Markets Authority continues to increase reporting and compliance requirements on the Fund and it is a credit to your chairman Mr David Scott and the trustees who are working in an increasingly costly, complex and onerous reporting environment in order to meet the new compliance regime.

The Trustees of the SRF Fund certify that: • All contributions required to be made to the Fund from the employers and from members in accordance with the terms of the Trust Deed, were made.

• All benefits that were required to be paid from the Fund in accordance with the terms of the Trust Deed, have been paid.

• Any benefits that have remained unclaimed for more than seven years (e.g. because members were unable to be traced) have been transferred to the Reserve Account.

• The market value of the assets of the Fund as at 31 March 2015 exceeded the total value of the benefits that would have been payable had all the members of the Fund ceased to be members at that date.

• The latest Seafarers Retirement Fund prospectus (#16) was registered on 24 September 2014.

• There has been no trust deed amendment.

While the membership of the main Fund has remained reasonably static, the Trustees urge members and their families to support the SRF KiwiSaver Scheme and share the financial benefits that it provides.

When I started work more than 40 years ago my retirement was only a speck on the horizon and something I gave no thought to. As a member of the Seafarers Union as it was in those days, I was required to join their seafarer’s superannuation scheme to which I have contributed to, along with my various employers. As I approach retirement, it looks much better having a benefit in the Seafarers Retirement Fund. This removes one of the issues, having enough money to have a comfortable and a financially independent retirement. I can’t recommend the SRF enough to young members as we will all grow old and to have some financial independence removes one of the worries from retirement and gives you the ability to take options as you get older, particularly given the fact that over the last few years the fund has been producing excellent returns on our investments and that is something I and my fellow trustees strive to attain.

2

8

5 year

improvement in economic data in the Eurozone, China’s sharemarket up again and USA regaining the momentum of economic recovery.

In 2015 our fund continued with strong growth, which gives a strong indication of another year of good performance. Long may it continue.

Mike Clark

3

David Scott

When the Global Financial Crisis hit in late 2008 there was panic from the investment community that we would not work our way out of the mess. The SRF had only its third negative return in the last 25 years.; however, most governments put in plans to address the economic issues and most of them have worked well. We are now seven years on from it and we have had stellar returns from the SRF, as well as very low inflation. I believe we will look back at this period as the golden weather for investing for the SRF members.

Chairman of Trustees

Trustee

The summary financial statements were authorised for issue on 8 July 2015

%

Performance

Fast forward to where we are today, the fund now offers a choice between the SRF and SRF KiwiSaver Scheme. The SRF is split into two parts, the conservative and market linked. The SRF KiwiSaver Scheme is the government scheme run by our trustees. The idea of not belonging to the SRF is not prudent, the saving for retirement has to start early. The fund has its ups and downs but the principle is we are in it for the long haul and over the last few years it has been returning percentages that will set you up for the future. As a trustee I wish everyone good savings.

%

The superannuation investment environment is constantly changing. It’s becoming much more complex and yet superannuation is more important than ever. So, I am very pleased with another good performance of our fund. The return of 13.42% with annual inflation less than 1% are exceptional good results. There are several factors that contributed recently to such a good return. Rebounding of oil prices, signs of

-5.00%

Benchmark

Andro Besich

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

SRF KiwiSaver Scheme

The history of seafaring is one where casual labour and last wage packets were the norm, after a lifetime of work, retiring with nothing to show for it. Our forefathers in the union movement took the position that a change was needed. The SRF started in 1971 our comrades knew that they would not get much benefit from the fund but they had the foresight to start it. Initially a welfare and superannuation fund, it soon changed to a superannuation retirement fund paid for by the members’ diverting wage increases negotiated with the employers into the fund.

This is still the same today.

0

Benchmark

As a trustee of the SRF two things come to mind. The first is why was the fund created and the second is our responsibility to oversee the fund in a prudent fashion.

5.00%

SFR Market Performance

Alan Windsor

After tax and expenses

10.00%

1 0

SIPO achieved 1 year objective

2.4%

Benchmark Positive Return

SRF KiwiSaver Scheme Trustees’ Certificate The Trustees of the SRF KiwiSaver Scheme: • Certify that contributions received in respect of each member, including contributions paid via the Commissioner in respect of each member, have been applied in accordance with the terms of the Trust Deed and the KiwiSaver Act. • Certify that the following contributions were received in respect of members during the year ending 31 March 2015: Members’ contributions, $191,328 (45 members); Employers’ contributions $109,600 (38 members); Crown contributions, $34,119 (43 members); Transfers in $160,393 (8 members).

• Certify that at the end of the Scheme year, the total value of the Members’ SFR KiwiSaver Scheme account balance was $1,718,059 and there were 77 members with accumulations in their SRF KiwiSaver Scheme accounts.

• Certify that the Scheme provider agreement between the Commissioner of Inland Revenue and the Scheme provider has remained in force throughout the period covered by the annual report.

• Certify that all benefits required to be paid from the Scheme in accordance with the terms of the Trust Deed and the KiwiSaver Scheme rules have been paid.

• Certify that the market value of the assets of the Scheme as at 31 March 2015 equalled the total value of benefits that would have been payable had all members of the Scheme ceased to be members at that date and provision been made for the continued payment of all benefits to members and other beneficiaries as at 31 March 2015.

• Certify that not more than 10% of the market value of the assets of the scheme is invested directly or indirectly in any employer who is a party to the scheme or in any company or entity associated with any such employer.

• Certify that the SRF KiwiSaver Scheme prospectus #7 was registered on 24 September 2014.

• Certify that the increase in the administration fee on 30 July 2014 to $5.63 per member per month (previously $5.55) is not unreasonable having regard to the KiwiSaver Act 2006 and any guidelines published by the Financial Markets Authority.

• Certify that there were no trust deed amendments.

Chairman of Trustees

Trustee

The summary financial statements were authorised for issue on 8 July 2015 and the full financial statements comply with and were registered with the Registrar of Companies under the Financial Reporting Act 1993 on 27 July 2015. It should be noted that this is a restricted scheme.

10

11

GARRY PARSLOE’S RETIREMENT

(year to date yields) 12

10 9 8

%

Thanks and best wishes from us all and it has been good knowing and working with you.

This year we are disappointed to report that the unallocated contributions has a total of $54,068.

54,068

75,044

88,704

88,704

99,993

92,609

60,000

7 Habits of Highly Successful Private Share Investors

31 March 2015

31 January 2015

30 November 2014

30 September 2014

29 July 2014

0

The admin team work extremely hard and tirelessly to make contact with these members, including enlisting the help of the employer, and it is sad when the team’s hard efforts do not pay off.

We need to reiterate again that it is very important that if members do not have an account in the Seafarers Retirement Fund that they complete an application to join as this means that contributions that are remitted by the employer on behalf of the member are allocated immediately to the member’s account to allow them to take advantage of the vesting scale that is applicable to the employer’s account and depending on the type of benefit is paid to you.

One of the members who remain on the unallocated list so far has missed out on 45% of the employer account so, for example,if the employer has contributed $20,000 of employer contributions, this member has missed out on $9,000 worth of contributions.

In the book Free Capital it profiles many successful private United Kingdom share investors, providing an insight into their lives as well as their methods for financial success. All of the private share investors in Free Capital have three things in common:

•

• They invest for freedom and not consumption. They prefer

• They save large chunks of their income instead of consuming it.

• They have learned about investing and managing money, often through very painful financial disasters.

• They risked their capital in the stockmarket for superior long term returns.

The author of Free Capital, Guy Thomas, has identified seven things that most of his profiled successful investors have in common.

•

•

Most of the successful investors seem to have been born with a forward looking mind set. Many were interested in making money from an early age, and none had big debts to pay off or other bad financial decisions to pay off before starting to invest.

They had few responsibilities or dependents. It is hard to work out if this is cause or effect. However it may be that they did not want to be answerable to others for decisions they make.

They are not normally career minded, and they haven’t turned their backs on successful careers to start investing.

•

self-determination to flash houses, holidays and cars. They do not mind that investing takes time to accumulate wealth and prefer this to a big salary that gives an immediate hit to the bank balance. They also may find it more of a challenge to spend wealth than a temptation.

They avoided borrowing to invest. Gearing works well in the sharemarket when it is going up, however when it goes down, it takes all of your geared up capital with it as well.

• These share investors are not team players, which is probably •

not unexpected as they do not go with the crowd. They like to make decisions and then act on them without reference to anyone else.

They enjoy investing, some for the intellectual challenge and stimulation of being involved with the unknown as well as technology, economics and other science and arts disciplines.

Successful private share investors tend to be low profile and keep to themselves, and New Zealand has them. If we are investing in the New Zealand sharemarket we may be able to learn from them.

Start year with

Add

Minus

February 2015

11.53%

1.89% January 2015

10.36%

1.64% 6.41% December 2014

1.38% November 2014

6.73%

1.14% October 2014

6.78%

0.89%

5.92%

5.239%

0.65% August 2014

0.40% July 2014

3.19%

0.16%

1.69%

June 2014

-0.06%

2.21%

May 2014

0.29%

0.92%

SRF Membership

September 2014

$

0

April 2014

80,000

2.40%

1

7.64%

2

2.12%

4

MISSING MEMBERS CONTRIBUTIONS

30 May 2014

6

3

100,000

REVIEW PERIOD

7

5

120,000

20,000

Conservative fund

11

We gave him an appropriate send-off at his last trustees’ meeting in February 2015. His wise council will be missed, as well as his jokes and humorous tales.

He has retired to Thailand where he has recently built a new house; one of his first guests will be another trustee, Andro Besich, who works for Silver Fern Shipping and will be returning from Europe and calling in to see how retirement is treating Garry.

Unallocated Contributions

40,000

Market linked and SRF SRF KiwiSaver Scheme

Credited to member who left during the year

April 2013 March 2014

Last February marked the end of an era with the retirement of Garry Parsloe. He had served for more than 35 years as a trustee for the Seafarers Retirement Fund and its predecessors. During this time, Garry always came to the trustees table, as a trustee, with his union hat firmly in his back pocket. He always worked in the members’ best interests through the trust deed, and was a source of plenty of background knowledge about members.

He had a vast amount of history of the SRF, and was one of the foundation members in 1972 when it began as one of the first multi-employer superannuation schemes in New Zealand.

Interim Interest Crediting Rates

End year with

629 + 26 - 55 = 600 Comprising: Resignations 17 Retirements 19 Ill-health cases: 7

As at 1 April 2014

Death & TPD 2 Redundancies 8 Other 2

This is the number of members at 31 March 2015 year.

SRF KiwiSaver Scheme Membership Start year with

Add

Minus

End year with

65 + 20 - 8 = 77 As at 1 April 2014

Comprising: New members or those transferring from other schemes.

Comprising: Members exiting at end payment date or due to death, emigration, transfers out to other schemes, or starting contribution holidays or otherwise stopping contributions.

This is the number of members at 31 March 2015 year.

STOP PRESS!

Long-term Price and Cost Movements

12

The New Zealand Reserve Bank puts out indices for various general price movements over periods of time and the following information has been sourced from its website.

PROPOSAL TO MERGE THREE SUPERANNUATION SCHEMES INTO ONE A proposal is presently being developed to merge three maritime industry superannuation funds. They are the Seafarers Retirement Fund, the Waterfront Industry Superannuation Fund and the New Zealand Harbours Superannuation Plan.

Over the last 26 years the SRF Market Linked Fund has earned $3.02 for every dollar that a member had in at 1 April 1989, and this is a compound annual growth of 5.7% p.a. The Consumer Price Index or CPI has increased, with a bundle of good costing $1 in 1989 now costing $1.80, a compound annual increase of 2.3% p.a. This shows that the SRF Market Linked Fund has met its long-term objective over these 26 years to beat inflation by 3% per annum, and it has done this by a compound amount of 0.4% p.a.

A $1 invested in housing in 1989 would have earned $3.21 or a compound annual increase of 5.8% p.a.

Wages over this period have increased with the earnings of $1.00 in 1989 now being equal to $2.23 or a compound annual increase of 3.2%

One Dollar Change in Value in 26 years

This would increase the critical mass and make some cost savings for members. The size would increase to $240 million of assets and have 2000 members. A committee has been drawn up from the three funds to draw up a plan. This will be reviewed by the SRF trustees and our lawyers to ensure that it is in the best interests of all the parties that form the SRF, including the Maritime Union of New Zealand, Employers Management Committee and very importantly, the SRF members. The plan will also have to be signed off by the regulator, the Financial Markets Authority.

5 4.5 4 3.5

$

3 2.5 2 1.5

The present deadline for this to be completed is by the end of March 2016, so this is tight considering the amount of work to be completed. We will keep all parties updated on progress over the coming months.

1 1.5 0

SRF Market

Account Manager Ashley Goss PO Box 2764, Wellington 6140 Level 3 State Insurance Tower, 1 Willis St, Wellington Administrator Kim Basher ph: 09 362 9541 email: kim.basher@aonhewitt.com PO Box 3167, Auckland 1140 Level 2 AMP Centre, 29 Customs Street West Auckland 1010.

All correspondence to the Trustees should be addressed to: Secretary of the Fund, 62 St Andrews Rd, Havelock North

5 4

% 3 2 1 0

SRF Market

CPI

Housing

Wages

If you ever have a complaint about some aspect of your dealings with the SRF or the SRF KiwiSaver Scheme, there is a three-level procedure we recommend you follow. It is like an escalator, starting at level one. There is no charge for the service.

3

2

Go to the person you have been dealing with.

Wages

6

Complaints Procedure in Three Levels

1

Housing

Compound Annual Increase over 26 years

SRF Directory Secretary to the Fund & the Trustees David Scott, 62 St Andrews Rd, Havelock North Ph. 06 877 0282, 027-595 9446 davidscott@paradise.net.nz Fund Insurer Sovereign Assurance Company Ltd Fund Investment Managers AMPC, Devon Funds Management, Pathfinder Asset Management, Nikko Asset Management Auditors Deloitte Legal Advisors Simpson Grierson Fund Administration – Aon Hewitt (a division of Aon New Zealand)

CPI

Contact the Trustee who acts as Complaints Officer. Andro Besich Silver Fern Shipping Ltd Level 8, Forsyth Barr House 45 Johnston Street PO Box 10-090 Wellington 6143 Ph: 04 460 3928 or 0274 415 941 email: abesich@sfsl.co.nz

Contact our professional complaints service.

Financial Services Complaint Ltd Level 13, 45 Johnston Street PO Box 5867 Wellington 6145 Ph: 04 472 3725 email: info@fsc.org.nz