New Zealand Superannuation and Retirement Income Act 2001

43 Amount of required annual capital contribution

The required annual capital contribution for each financial year is—

a ÷ 100 × that year’s GDP − b

where—

a

is the percentage of that year’s GDP that, if the same percentage of the GDP that is projected for each of the next 40 years were contributed (by way of either or both of annual required capital contributions and annual expense payments under section 45) each year for the next 40 years, would be just sufficient, taking into account the Fund balance at the start of that year and projected Fund investment income over the next 40 years, to enable the Fund to meet the expected net cost of the New Zealand superannuation entitlements payable out of the Fund over the next 40 years

GDP

is the projected annual gross domestic product of New Zealand

b

is the expected net cost of the New Zealand superannuation entitlements payable out of the Fund in the year

net cost

is the cost of New Zealand superannuation entitlements net of any amount of tax deducted or withheld, or required to be deducted or withheld under the PAYE rules in the Income Tax Act 2007

next 40 years

means the financial year for which the required annual capital contribution is being calculated plus each of the following 39 financial years.

Section 43 formula item net cost: amended, on 1 April 2008 (effective for 2008–09 income year and later income years, except when the context requires otherwise), by section ZA 2(1) of the Income Tax Act 2007 (2007 No 97).