Senior Master Fixes Interest Rates for Common Funds

June 01, 2012
Competitive rates fixed for beneficiaries

In conformity with sections 113(14) and (15) of the Supreme Court Act 1986 [the Act] and with Rule 79.09(1) of the Rules of Court, the Senior Master has fixed the following interest rates with the approval of the Chief Justice:

1. With respect to Common Fund No. 1 for the year to 31 May 2012:

1.00 per centum per annum.

1. With respect to Common Fund No. 2 [CF-2] for the year to 31 May 2012:
   • For beneficiaries with funds invested in both Common Funds No. 2 and Common Fund No. 3 as at 1 June 2011, 6.00%.
   • For the other beneficiaries of Common Fund No. 2, 6.20%.

The rates fixed in respect of Common Fund No. 2 are very competitive, especially in view of the current financial environment.

To the beneficiaries of CF-2, it means that they have a Government-guaranteed fund, which they can access at any time (as their funds are not locked away for the period of, say, a term deposit), and which affords them above-market-rate returns from which cost recovery has already been made.

It is also worthy of note that Common Fund No. 2 has outperformed all possible benchmarks since 1992.  During that time, the outperformance above the relevant investment benchmark achieved for CF-2 has added a cumulative value of over 25% to the fund’s returns.