apr-11.pdf (2.07 MB) - Crown Ownership Monitoring Unit

Accident Compensation CorporationCHAIR » John JudgeBOARD » John McCliskie,Rob Campbell, Murray Hilder,Jane Huria, John Meehan,Paula Rebstock, Jill SpoonerCHIEF EXECUTIVE »Ralph StewartActivitiesACC is a Crown entity, establishedto provide comprehensive nofaultpersonal injury cover for allNew Zealand residents and visitors.Since 1999 in the Work, Earners’and Motor Vehicles Accounts andsince 2001 in the Non-Earners’Account, ACC has operated on afully funded basis; that is, it collectssufficient levies to cover the lifetimecosts of injuries incurred in thatyear 15 . The future costs of theseclaims represent ACC’s liabilitiesand the Corporation invests fundsfrom these levies to cover thesefuture costs. These investmentsrepresent most of ACC’s assets.Financial performance measures$m 2007 2008 2009 2010 2011 5 YearFunds Under Management (FUM)*Opening FUM 7,934 9,181 9,569 10,570 13,100 7,934+/- Investment returns 767 (77) 316 1,350 1,726 4,082+/- Tax+/- Cash inflow/(outflow) 480 465 685 1,180 1,775 4,585Closing FUM 9,181 9,569 10,570 13,100 16,601 16,601Returns & Risk% paReturn** 9.3% (1.0%) 3.1% 12.5% 12.4% 7.1%Objective*** 9.6% (1.2%) 0.9% 11.4% 11.7% 6.2%Passive benchmark 9.1% (1.7%) 0.4% 10.9% 11.2% 5.7%Fund risk (volatility****) 6.0%Passive benchmark risk 5.6%Notes:* Total Reserves Portfolio assets. Excludes operational cash** After an allowance for investment management fees and costs (-0.20% pa) and after adding back offshorewithholding taxes (+0.04% pa) paid by ACC. ACC does not pay tax in New Zealand*** Passive benchmark plus 0.5% pa**** Annualised standard deviation of quarterly returns. Indicative of expected variability of the return in any one yearAsset allocation – past five years% FUM■ Other Growth Assets ■ Property ■ Overseas Equities ■ New Zealand Equities■ Overseas Bonds ■ New Zealand Bonds ■ CashReturn indexReturn index (based at 100 at end 2004/05 Q4)15 A “residual” levy will be collected until2018/19 to cover the fully funded costs ofinjuries incurred between 1974 and 1999that still require support.— ACC — ANZ NZ Govt Stock Index — MSCI World Equity (hedged to NZD)page | 52