'Private sector loses further $40M to the Government’

Press, 14 May 1982, Page 20

'Private sector loses further $40M to the Government’

PA - Wellington Recent Government actions had withdrawn an additional $4O million from the private sector, said the chairman of the New Zealand board of the Colonial Mutual Life Assurance Society, Ltd. (H. G. Cailam) in the annual report. The latest impost—the direction that life offices and other institutional investors place a further one per cent of funds in the Government and local body sector—came after a similar one per cent increase last year.

“These Government directed investments carry rates of interest below real market rates, and policy holders who are providing for their future securitythrough insurance are being penalised,” he said. New annual premiums at $8,190,000 were 25 per cent up on last year, and new sums insured rose 28 per cent to $579M. New superannuation contributions increased 40 per cent to $4,280,000.

Discussing superannuation, 'Mr Cailam said the average value of units in the flexible

investments programme rose 2.4 per cent, net of the investment management charge. The deposit administration programme for clients who wanted a more predictable return increased from 11.75 to 13 per cent.

New sums assured were $579,400,000, new annual premiums $8,190,000; premium income $38,700,000; investment income $28,600,000; distributed surplus $11,300,000; reversionary bonuses were $23,600,000. Policyholders’ funds were $2BB million and payments to policy holders were $29,300,000.

Bonus rates were again increased. For a policy in its first year in force the new bonus is $34 a $lOOO, and the maximum bonuus for a policy that had been in force for many years was $l4B a $lOOO compared with $l2O last year.

Terminal bonuses paid on death or maturity were also increased substantially. The rate of one per cent on the sum assured after the first five years now applied to a maximum of 40 per cent, 60

per cent, higher than the previous maximum. A weaker sharemarket caused a 0.2 per cent drop in the Colonial Mutual’s flexible investment programme for shares in the three months to March 31—but higher debenture rates saw the value of units in its fixed interest portfolio rise 2.4 per cent in the same period. The society’s report on its investment-linked superannuation fund for the March quarter, showed that while the unit values on its share E. portfolio fell 0.2 per cent in the three months, it had risen 17.4 per cent in the 12 months to March 31. Total market value of the portfolio was $9,882,851. an increase of $4,361,344 on the year.

The debenture portfolio unit value rose of 2.4 per cent for the three months, compared with 13.1 per cent for the year. The average yield to maturity on the debenture was now 18.6 per cent, compared with 16.3 per cent in the year to March 31. Unit values of the property portfolio rose 4.4 per cent in the quarter, and 16 per cent for the vear.