An Auditor-General's report has revealed the degree to which the global financial crisis (GFC) has impacted on assets and investments held by Commonwealth Government agencies, including those held by the Future Fund, resulting in some incurring operating losses.
The Australian National Audit Office (ANAO) report said the GFC had led to a significant fall in interest rates during 2008-09 and that this had impacted on the valuation of a number of large assets and liabilities held by Australian Government entities, as the values of these assets and liabilities are affected by interest rate variations and other factors.
It said examples included investments held by the Future Fund, Commonwealth Government securities on issue and long-term assets and liabilities discounted to present value using the government bond rate or other market-based yields, including the Australian Government's superannuation liability, concessional loans such as the Higher Education Loan Program and employee provisions.
The ANAO report said the decrease in the government bond rates would result in an increase in these latter provisions and "this in turn will increase employee expenses and result in a number of agencies incurring operating losses in 2008-09".
It said the Department of Finance had obtained approval from the Finance Minister for losses incurred by agencies as a result of decreases in bond rates and had advised that, at the date the ANAO report was prepared, 61 losses caused by a decrease in bond rates had been approved.
Australia’s second-largest super fund has confirmed it is expanding its presence in the UK following significant investment in the region.
A member of the super fund has approached ASIC to investigate potentially misleading or deceptive representations by UniSuper regarding the holdings of its sustainable portfolios.
The median growth fund delivered 1.9 per cent in March, adding to the “stunning” rally that has seen super funds gain 11 per cent since November.
Vanguard has affirmed its support for the current super performance test, emphasising the importance of keeping the process straightforward.
Add new comment