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Friday 28 February, 2020

NASFUND announces 2019 audited results

NASFUND announces 2019 audited results

NASFUND has announced a 6.3 % interest to be credited to members’ accounts for the 2019 financial year. 

This followed acceptance of the 2019 audited accounts by the NASFUND Board at its meeting held on Thursday morning, 27th February 2020.

Chairman Charles Vee, on behalf of the Board stated that the results were positive in yet another challenging year. Chairman Vee said the Fund had demonstrated a strong resilience in attaining a positive outcome with an over budgeted performance in cash returns from investments and controlled expenses.

Mr Vee said “88% of Income was cash with 12% in valuation gains. Our investment posture has been relatively defensive over the last 4 years with cash of K381 million the main driver of portfolio returns. It should be noted 2019 profitability was also boosted by K 52 million of foreign exchange and valuation gains”.

“While the crediting rate of 6.3 % is better than the 3.5% declared for 2018, we remind members again of the benefit of locking away savings over the long term. This year over K 310 million will be allocated into 584,000 member accounts. Over the last 6 years average crediting rate paid to members was 6.3 % equating to over K 1.45 billion. I am pleased to inform that we continue to meet our investment target of achieving returns above CPI over a rolling five year period which on average is 5.81 % compared to CPI average of 5.44 % over the same time”.  Additionally, over 6 years, your Fund has paid K 2.46 billion in superannuation entitlements to members.  

“Analysis of our member data show 72 members have over K1 million in their superannuation account, 332 members have between K500,000 and K1 million, 8,634 members have balances between K 100,000 to K500,000 while the 575,641 remaining members have balances of K 99,000 and below”.

These balances highlight the fact that while annual returns from the investment portfolio are subject to market forces and fluctuate from year to year, member savings does increase significantly over a long period of time through the effect of compound interest and a dedication to investing in assets that provide secure long term returns. For example, 10 years ago, a member with savings of K10,000 with no new contributions would today have K 20,537.00 in their Superannuation Account.

We remind members that your long term NASFUND savings does have its benefits to ensure a comfortable retirement after active employment” Mr Vee said.

The highlights of 2019 are as follows:   

  • Gross Asset Value of K 5.32 billion representing a growth of 10 % from K 4.83 billion recorded in 2018. 
  • Net Asset Value of K 5.24 billion representing a growth of 10.3 % from K 4.75 billion recorded in 2018.
  • 15.4% increase in Cash income of K 381 million compared to K 330 million received in 2018.
  • Operating expenses of K 62.4 million against a budget of K 62.7 million, a savings of 0.75 %. 
  • Profit after tax of K 312.6 million compared to K158.7 million in 2018. 
  • Reserves of K 15 million equating to 0.3% of Members Funds.
  • 6.3 % interest to be credited to members accounts equating to K310 million.
  • 5.3 % increase in total membership to 584,679 from 555,133 members recorded in 2018.
  • 16 % increase in active employer base to 2797 establishments from 2402 in 2018. 
  • 8.5 % increase in contribution receipts to a record of K 562 million from K 518 million received in 2018.  
  • 492 educational & public awareness shop floor presentations to employers & members including 4 regional conferences, conducted throughout the country.
  • Payment of over K 383 million in superannuation entitlements to members representing 70,650 transactions compared to K 437 million paid in 2018. Of this, K 29.5 million was for Housing Advances, K 266.2 million in full exits, K 40.4 million for unemployment, K 17.8 million was death related and K 5.95 million on medical grounds.  
  • Completion of the revitalisation of the iconic Kina Bank Haus.
  • Consolidated ownership of the Port Moresby Harbour City Precinct.
  • Opening of the Loloata Private Island Resort owned 50% by NASFUND.
  • Introduced ‘Super Saturday Services” by opening our main Boroko and Lae Branches on Saturdays.
  • Introduced nationwide Super Sweep exercise identifying over 500 establishments for coverage.
  • Initiated engagement with industry & stakeholders on taxation and legislative reforms.
  • Rolled out initiative of employers remitting both member and employer contributions within 14 days of deductions with positive traction.
  • Hosted the second successful Employer Awards night and appointment of Justin Olam, NRL Melbourne Storm player, as our Brand Ambassador. 
  • Continued focus on upholding core values of prudence and governance in serving members and employers best interest.

“For this year, we will continue the focus on enhancing our member services while actively seeking opportunities to grow membership and new investments. This aligns with our five year strategy of growing the Fund to be healthier and wealthier.” Mr Vee said.

On this note I would like to sincerely thank our CEO Ian Tarutia, management and staff for their commitment and hard work over 2019 in delivering commendable results in this challenging economic environment.”  

Authorised by Charles Vee, Chairman

Photo caption: CEO, Mr Ian Tarutia, OBE, Chairman, Mr Charles Vee & CFO, Mr Rajeev Sharma after the announcement of the 2019 NASFUND audited results.

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