Government contributions to the New Zealand Superannuation Fund will total $3.1 billion over the next four years, $2.2 billion more than forecast in the December Half Year Update.
Finance Minister Nicola Willis announced the increased forecasts, which follow updated inputs to the legislated formula that determines contribution levels. The Government will contribute $562 million in the next financial year, rising to just over $1 billion in 2029/30.
Super Fund contributions are set by a legislated formula. Updated population projections, new inflation forecasts and other changes to formula inputs mean the Government is continuing to make contributions rather than drawing down from the Fund as expected in last year's Budget.
The Guardians of New Zealand Superannuation recently lowered their assumption of long-term expected returns from 7.8% to 7.2%.
The contributions are capital investments that add to government debt but do not count against the Budget capital allowance. Withdrawals from the Fund are expected from 2054 onwards to help meet the future costs of New Zealand Superannuation, which currently costs $24.7 billion a year and is forecast to reach $31.2 billion by 2029/30.