Nasfund Declares Annual Interest Crediting Rate of 11.75%

The audited financial statements were approved by the Trustee Board at its meeting today, March 13, 2025. Reporting Net Asset Value (NAV) of K8.1 billion and a notable Net Profit After Tax (NPAT) of K849 million for the year ended 31 December 2024. 

Following these results, the Trustee Board has declared an interest crediting rate of 11.75% for the 2024 financial year. This translates to a distribution of over K839 million to members' accounts this weekend, reinforcing the Fund’s commitment to Growth and increasing members' savings despite economic challenges. 

I am delighted that Nasfund’s growth has continued throughout 2024 despite what has been a tumultuous year both domestically and internationally. With strong membership growth and investment returns across the portfolio your Fund has reached the K8 billion milestone. This success is a testament to our Responsible approach to managing investments and ensuring long-term stability. 

In a year that started with the devastations of Black Wednesday, the continuing Government cashflow crisis adversely impacting local business performance, and shadowed by ‘a cost-of-living crisis’ the team at Nasfund has ensured that returns to members remain steady. Despite no major projects commencing in country during the year, we have seen strong Growth from our existing membership with 56,874 new members and 191 new companies joining the Fund.

The positive financial outcomes were significantly influenced by the valuation gains of K487m, more than double the valuation gain of K180m last year. It should be noted that K280m of this gain is from our investment in BSP, which represents 59% of the overall valuation gains.

Our crediting rate for 2024 of 11.75%, underscores our dedication to providing strong and stable returns to our members above CPI over a rolling five-year period, which on average is 7.2% compared to 5.1% CPI average over the same time during 2020 to 2024.

This performance underlines our dedication to ensuring the financial well-being and Trust of our members, and we look forward to this positive trajectory in the future. 

Main highlights for FY2024 include: 

• Cash income of K482 million compared to budget of K486 million (FY23: K485 million income) 

• Valuation gain of K487 million (FY23: K180 million)

 • Foreign currency loss of K5.7 million (FY23: 84.9 million gain) 

• Expenses of K78 million compared to budget of K86 million (FY23: K75 million) 

• Net profit before valuation of K336 million against Budget of K334 million 

• Net profit after tax of K849 million (FY23: K596 million) 

• Total assets of K8.19 billion (FY23: K7.13 billion) 

• Net assets of K8.12 billion (FY23: K7.07 billion) 

• Contributions received of K793 million, 12% higher than collected in 2023 (FY23: K705 million) 

• Member benefit payments of K591 million (FY23: K534 million) 

• Total membership increased by 4% to 715,873 members (FY23: 688,169) 

• Gross employer base increased by 5% to reach 3,776 employers (FY23: 3,585) 

• Interest credited of K839 million (FY23: 584 million) 

• Interim Crediting Rate paid to Exiting Members during the year of K13.7 million

The short- and medium-term outlook of PNG’s economy remains cautious, confidence and performance will be underpinned by a projected recovery in the extractive sector.

Nasfund as an investor and landlord sees extraordinarily improved performance when the country’s resource projects are operational, as it improves the property portfolio in terms of value and rental income and increases contributions due to a larger work force. 

Throughout the year, while there were economic challenges, it's important to recognize the resilience and strategic adaptations made by our team, our strategic response and portfolio adjustments have been proactive and thoughtful. 

Our allocation of assets for international investments is currently at 17% of Net Asset Value, which is well below the board-approved target of 25% and within the prudential standard limit of 35%. 

While we saw an increase in interest rates on Government Securities in 2024, the impact of these increases will only be seen in our future results. The lower interest income in 2024 was a result of lower yields on Government Inscribed Stock and Treasury Bills. 

Our investment division will intensify efforts to identify and assess opportunities in FY25 while remaining vigilant in monitoring market conditions and adjusting our investment as needed to ensure we are maximizing returns for our members while also managing risk.

In 2024 we implemented our new strategy for the years 2024 – 2026, with a focus on enhancing operational efficiencies and superannuation education and Connecting with our members. We have also launched a series of superannuation videos in both English and Tok-Pisin which are being used to drive awareness of our products and services and the importance of long-term savings. 

We continue to focus on digital initiatives, launching our WhatsApp appointment process, with more strategic initiatives aimed at improving the overall member experience. This means placing more emphasis on adding value for our membership while also helping them increase their retirement funds.

We also embarked on a number of AI initiatives within our finance operations, to drive more efficiencies. Following the success of these initiatives, we are now in the process of developing more AI initiatives focused on delivering a better experience for members and employers. 

Most of you will be familiar with our Membership Discount Program (MDP), which provides discount opportunities for our members with 29 partners. In 2024 we launched the Employer to Employer (E2E) Discount partnership. This initiative gives employers with Nasfund the opportunity to enjoy corporate discounts they may not otherwise have received. To date, we have signed 10 E2E partners. 

As we continue an upward trajectory, with 2024 being the best year since 2010, I would urge members to look at consistent long term returns as superannuation is for the long term – this year our results were supported by BSP share value increases and international share markets, factors we do not influence and are beyond our control, next year it may be different story. Valuation income 2024represents 51% of total income.

At Nasfund we are always focused on being ready for tomorrow. We remind our members that if you remain invested throughout employment then your long-term returns can grow exponentially over time. This will provide financial security following your retirement from active employment. 

It is important to understand that interest is calculated in two parts, interest on your opening balance at the start of the year plus interest on daily average rate based on date of contribution received in our bank account. This makes timely remittance of contributions very important to gain full advantage of interest throughout the year. Those employers who have not remitted funds are disadvantaging their employees who are our members as they are missing out on the benefit of high interest crediting this year.

This achievement reflects Nasfund’s prudent approach to its investments and expense management, ensuring the long-term financial security and confidence of our members. The Fund remains committed to safeguarding and growing retirement savings, despite external economic pressures. 

Nasfund remains a Trusted partner in securing the financial futures of its members, reinforcing its position as Papua New Guinea’s leading superannuation provider. The Fund looks forward to continuing this positive trajectory, ensuring the long-term financial security and confidence of its members.

I would like to sincerely thank our CEO, Rajeev Sharma, executive management, and staff for their commitment and hard work in 2024 in delivering such commendable results in this economic environment.