New Bill Restricts Superannuation Funds

Press, Volume CX, Issue 32382, 22 August 1970, Page 17

New Bill Restricts Superannuation Funds

(N.Z. Press Association) WELLINGTON, August 20. Further details of the proposed legislation affecting separately-constituted superannuation funds, were given in a statement today by the Minister of Finance (Mr Muldoon).

In terms of the Land and Income Tax Amendment Bill, introduced in the House last week, such funds will be able to claim exemption from taxation for their income only if they meet certain investment requirements. Within five years, the Minister said, they will need to hold not less than 30 per cent of their assets in publicsector investments (Government of local-authority stock). “This will mainly affect superannuation funds domiciled in New Zealand, but will also affect some kept outside New Zealand,” said Mr Muldoon. Where a superannuation fund holds assets overseas on behalf of New Zealand residents (which applies to overseas funds with New Zealand contributors) 100 per cent of gross contributions and income derived in New Zealand will have to be invested in New Zealand Government stock. Where the fund agrees to repatriate sufficient overseas assets held on behalf of New Zealand residents, to enable it to comply with the 30 per cent publicsecurity ratio the 100-per-cent investment - requirement would not apply. In support of this new measure, the Reserve Bank will cease giving approval to the

export of contributions to overseas-domiciled superannuation funds, with the following minor exceptions: Where the number of members in New Zealand of the overseas fund is five or less. Where the contributor is only temporarily resident in New Zealand. Where foreign nationals now resident in New Zealand are entitled, by arrangement with the Government of their former country, to contribute to Government - operated funds in that country. It will be a condition of remittance in these cases, that benefits payable to New Zealand residents are transferred through a banking system, said Mr Muldoon.