Super fund makes K89mil profit

The National Business

NAMBAWAN Super Ltd (NSL) yesterday announced a net profit of K89 million from its 2020 financial results, saying the results were significantly impacted by the Covid-19 on PNG economy.
The result allowed the fund to declare one per cent interest which was credited to members’ accounts.
NSL board chairman Reg Monagi said the extraordinarily difficult economic conditions, which were worsened by the global Covid-19 pandemic, heavily impacted values and returns for many of the fund’s key investments in the PNG economy.
Monagi said while the 2020 result would be disappointing for members, the primary cause was the reduced values of some of the fund’s well-established investments that were expected to bounce back when economic conditions improved.
“These business and properties are still important to our investment mix, and the fund believes as economic conditions improve these asset values will bounce back,” he said.
“The assets are still held by the fund for the members and at this stage, we aren’t considering selling or divesting them from our portfolio.
“Despite the low crediting rate, the fund’s net assets grew by 6.2 per cent due to continued strong member contributions and now stands at K8.14 billion.
“Members must know that their funds are safe and that Nambawan Super manages a diverse and balanced portfolio of investments.
Despite a lower than average investment performance in 2020, compound average returns over the past five years have been 5.7 per cent, almost a full per cent over CPI for the period, which means real returns to members.
“2020 was a challenging year with the sharpest global economic decline in a century and at times the risk of negative return was considered a possibility,” Monagi said.
“The fund took steps to reduce the risk of a negative return, including delaying non-essential projects and tightening expenditure wherever possible.
“The tough economic climate has carried over to 2021, but we will continue to manage the fund to maximise returns within our risk tolerance.
“Indeed, for most members, the time to retirement is many years away, and in that time they should experience varying returns but overall long-term gains.”
Monagi also noted that:

  • NAMBAWAN Super’s net asset value now totals K8.14 billion up from K7.6 billion;
  • THE management expense ratio was 1.05 per cent;
  • TOTAL contributions for 2020 were K893 million, an increase from K832 million in 2019;
  • TOTAL member payouts were K525 million, a decrease from K546 million; and,
  • FUND membership grew to 207,986.

“In these tough times, I encourage all members to continue to save and to not be distracted, from saving, by the changing economic climate,” he said.
“Saving remains critical to the long-term financial survival of all our members as superannuation is long term.”