Dear Editor, Re-Cook Islands superannuation withdrawal.

When my husband retired the first time from Government he was able to withdraw all of his super which he invested in struggling Tav. Bearing in mind he wasn’t even anywhere near retirement age and this happened around 20 years ago, within the 25 years Beddoes is talking about. Wrong twice already. Not a good start from someone managing Cook Islanders Super.

Beddoes is claiming not many people own land on Rarotonga. REALLY? If that is the case, then what is the problem giving the green light to a few land owners wanting to withdraw their full pension to invest in rental accommodation?

You allowed it for my husband, got to do it for the rest.

There is a housing crisis on Rarotonga and the need for rental homes has never in our history been at this level. The gentleman hoping to withdraw his full super to build a rental unit is on the right track and will definitely get a better return on his super than Beddoes can ever achieve.

E.g.  small unit cost                                                      $50,000.00

Long term rental @$220.00                                          $11,440.00   

approximately more than 20% yearly growth

Short term at 60% occupancy $90.00 a night                 $19,008.00                                    approximately more than 40% yearly growth.

Perhaps Beddoes can advise through this paper their percentage growth. I believe there was zero growth in at least a year during his management. Got this information from a super contributor. Feel free to correct me.

Beddoes can also confirm if they’re planning to invest Cook Islanders super in an accommodation business. Now, they definitely don’t have any land and will have to purchase. If this is correct, then I will call it stealing business opportunities from super contributors.

How about loaning to super contributors at the same percentage rate your overseas investments are returning? Believe it or not we Cook Islanders are very capable of operating businesses and know how to work hard.

25 per cent of one’s superfund is definitely not enough to seriously start a business. I for one know the struggles of starting a business with minimal capital and no cash flow. The chances of failing are almost 100 per cent.

Our company contribute thousands monthly towards our hardworking employees’ super fund. I will now take an interest in the CINSF operations.

Yours sincerely,

Ellena Tavioni.

Reply

Thank you for your letter. 20-25 years ago, I believe if you check with him, it was the New Zealand Government Superannuation Fund or GSF that Cook Island Government employees contributed to, many were paid out from the New Zealand scheme in full when they left to join the CINSF. During that period if you had a CINSF balance of $15,000 or less you could be paid out in full.

In our experience we are seeing more and more Cook Islanders leaving as they are unable to remain on the land they are on now, almost all explain that the Rarotongan landowners are not renewing their lease, so as Cook Islanders and not Rarotonga land owners they are leaving to be able to own their own home for them and their family in New Zealand and Australia, that is what we are being told by those members signing on their exit forms.

In my personal view I believe it is a blind spot, if you are fortunate enough to be a landowner in Rarotonga, you have that security, but those Cook Islanders that cannot attain land in Rarotonga, is there a solution for them? 

The calculations for your scenario of a rental property exclude all the costs associated with it, the depreciation, insurance, repairs maintenance etc, the purchase price of land but that’s ok there may not be a price if you are a Rarotongan landowner.

The CINSF have looked at the option of building residential long-term housing, if it was $50,000, we would have done it already. But it is definitely being considered to support the long-term housing market on a larger scale and a scale that warrants the investment.

The CINSF continues to consider large scale investment opportunities not just abroad but also here in the Cook Islands, we only move forward on an opportunity when it meets all our investment criteria, our risk appetite, security requirements, and most importantly our returns to our members.

Through our financial education programmes that our team delivers to employees and employers, we emphasise the importance of the Cook Islands’ social security framework, which consists of three pillars:

1. Pillar 1: The Cook Islands Government Pension, providing two monthly payments to pensioners.
2. Pillar 2: The CINSF Pension, offering an additional monthly payment.
3. Pillar 3: Personal savings, investments, small businesses, or continued employment.

Residential investments fall under Pillar 3 and are the responsibility of individuals. Using funds from Pillar 2 to build Pillar 3 undermines the structure designed to provide long-term financial security. During Covid-19, Pillars 1 and 2 continued to support pensioners, while rental income and tourism were severely impacted – demonstrating the resilience of our system.

The CINSF was established during a time of national financial hardship, thanks to the leadership and vision of individuals like Norman George, Tony Manarangi, and Iaveta Short. Their contributions laid the foundation for a secure and well-governed fund. With continued support from the Government and our Board, CINSF remains a cornerstone of financial security for our people.

We invite all members to attend our upcoming General Meeting, where these important issues can be discussed further.

Meitaki,

Damien Beddoes, 

CEO CINSF.