CEO Online
Welcome to the second edition of CEO Online. As part of the Board of Trustees commitment to keeping members informed, this month I am providing an update on the Scheme's investment performance and recent changes to the Boards' investment advisor arrangements.
Investment Returns
As you may be aware, world markets have been experiencing a downturn
for some months and the CSS is no exception. The CSS financial year to
date investment return at the end of October 2001 was -6.09%; while the
estimated investment return for the month of November is 2.89%. This
resulted in an estimated financial year to date investment return to the
end of November of -3.38%.
Exit Rate
Given the estimated investment return to the end of November, the current exit rate has remained at 0.00%.
The Boards are precluded (by legislation) from declaring a negative exit rate or crediting rate and so the exit rate from 11 December 2001 is zero.
Members who are concerned about the difference between the exit rate of 3.4% per annum declared in August and the current rate of zero should be aware that the exit rate is a per annum rate and must be pro-rated since 1 July 2001. However, it is important to remember that the PSS is a defined benefit scheme and the impact on the Fund returns may not have an affect on your final benefit. This will vary upon personal circumstances.
New Investment Advisor Arrangements
Over the last 12 months, the Board has conducted a review of its investment advisor arrangements. The review involved extensive research to arrive at a world's best practice model.
After considering detailed submissions and conducting intensive interviews of a short list of candidates, the Board has decided to adopt a multi-investment advisor configuration for the next three years comprising the appointment of:
· Total Risk Management as advisor for strategic asset allocation/investment policy, and to provide risk monitoring, investment research and performance reporting at a total fund level.
· John A Nolan & Associates to provide investment manager selection and monitoring with respect to Australian and international equities, fixed interest and Australian property.
· Wilshire Australia to advise the Board on new Australian private equity investments and monitor the Board's existing Australian private equity commitments.
The Board will also engage organisations with specialist expertise on a case-by-case basis.
The investment advisors will work closely with the Board's new Investment Team.
Next Edition
Amongst other things, in the next edition I will again be talking about how investment returns impact on deferred benefits.
On behalf the Trustees and Executive staff, I wish you all a safe and happy holiday season and look forward to communicating with you again in the New Year.
