Glossary

Asset Class

An asset class is a similar group of securities or assets that share common characteristics

Benchmark

A standard against which the performance of a security, index, or investment fund can be measured.

Board

The Board of the National Superannuation Fund.

Bond

A debt investment with which an investor loans money to an entity (company or government) that borrows the funds for a defined period of time at a specific interest rate.

Cash

Generally taken to mean a very short-term investment earning interest from a highly rated bank.

Commodities

Tangible products, such as metals, crude oil or grain.

Compulsory Account

Combination of a Member’s Employer and Employee Contribution Accounts

Contract Worker

A non-resident of the Cook Islands working on an employment contract of not more than 3 years.

Derivative

An Arrangement or Product whose value derives from and is dependant on the value of an underlying asset such as a commodity, currency, or security. Derivatives can be used to manage risk, reduce cost, and enhance returns.

Diversification

Is a process of allocating capital in a way that reduces the exposure to any one particular asset or risk. Diversification may help mitigate risk or volatility by investing in a variety of assets.

Early Retirement Age

Where a Member aged between 55 and 60 ceases employment as a result of ill-health or redundancy.

Equities

More commonly known as shares or stocks. Securities that signify ownership in a Corporation and represents a claim on part of the corporation’s assets and earnings.

Fixed Interest

A term used to describe investments that generate income in the form of agreed interest payments over an agreed period of time.

Growth Assets

In the portfolio, growth assets comprise equities.

Group Life Insurance Policy

Means the current insurance policy arranged by the Trustee.

Ill Health

Where a Member has been absent from employment through illness for 6 consecutive months and is unlikely to ever engage in employment for reward in any occupation.

Index

A measure of performance of a collection of assets typically across a sector, country, region or style (e.g. Dow Jones, MSCI)

Investment Direction

A Member’s choice of investment in any one or any combination of the three CINSF Investment Funds.

Investment Ranges

The minimum and maximum allocations a Trust can give to a given asset class.

Legal Personal Representative

Means a person appointed to administer a deceased person’s estate or to manage the financial affairs of a person when that person is unable to do so.

Normal Retirement Age

Means 60 years of age.

Old Age Pension

Any pension payable under the Welfare Act 1989.

Out Performance

Excess performance above the benchmark or above the targeted return.

Pension Account

The account created by the transfer of all funds in a Compulsory Account on the date of a Member’s nominated retirement age.

Pension Rates

The rate applied by the Trustee on the recommendation of an Actuary for the calculation of a Member’s retirement, early retirement or a spousal pension.

Portfolio Construction

The allocation of risk in a portfolio. Portfolio construction embraces the broad allocation of risk capital to various value-add strategies as well as the specific allocations of risk capital to investments.

Return

The return on an investment after manager fees and taxes.

Risk

Is a term used to imply the uncertainty of a return, and the potential for financial loss.

Shares

A term typically used to describe an ownership interest in a company. Shares are also known as equities.

SIPO

Statement of Investment Policies and Objectives sets out the portfolio construction, benchmarks, and investment objectives.

Total and Permanent Disablement

Where a Member has been absent from employment through injury or illness for 6 consecutive months having become incapacitated to such an extent as to render the Member unlikely to ever engage in employment for reward in any occupation or work for which the Member is reasonably qualified by education training or experience.

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