Investment markets have recovered since a sharp sell-off in April when President Trump first announced steep tariffs against most US trading partners. However, markets barely registered when Trump recently announced a fresh round of tariffs beginning 1 August. Perhaps investors are betting on Trump backing down. Who knows what is around the corner and how markets will respond? There is every chance the volatility we’ve seen in the first half of 2025 will continue.

“It’s time in the market, not timing the market, that matters.”

The volatility in share prices experienced this year is not unusual by historical standards. For example, in March 2020, share prices as measured by the S&P 500 index jumped by as much as 9.38% in a single day and fell as much as 11.98%. Given the current market volatility, we think it’s worth illustrating the danger of trying to time the market either by moving to a more conservative or higher-risk option. It is wiser to make a choice based on your long-term goals and stay the course. Read more

It may be tempting to head for the hills during times of market volatility and switch to an investment option that is more likely to provide steady, consistent returns. This may be a good strategy if you’re saving to meet a more immediate financial goal. Over the long term though, you must be mindful that inflation has the potential to erode the spending power of your savings.

Investment switches do not happen in real time even if you make the change online. If you decide to change your current investment, your account balance will be valued based on the unit price for the day you request the change, which is typically known two business days later. Your online account shows an estimated balance based on the latest available unit price, which could be two days old, so your balance will always be different at the time your switch (or withdrawal) takes effect. The value of your holdings may have increased or decreased when the change is processed. This is something to be aware of and important to consider particularly during times of increased market volatility.

As you know, sworn staff now have the option of reducing standard employee contributions from 7.5% of salary to 5%, 3% or 0%. You can also boost your savings if you wish by making additional voluntary employee contributions between 1% and 10% of salary. You can reduce or increase your contributions online by visiting the MyPolice Employee Self Service portal.

Statistics released by the Retirement Commission highlight how much better prepared for retirement PSS members are relative to people in KiwiSaver. The average PSS balance at 31 December 2024 was just below $224,000, which compares to an average balance of just $37,000 for KiwiSaver members. Some of the difference will be because PSS (established 1992) has been going much longer than KiwiSaver (established 2007) and KiwiSaver includes many New Zealanders on lower incomes. However, it is likely the higher PSS employee and contribution rates are the key reason for the disparity.

We’ve made a number of changes since our last member survey in 2021. These include introducing a more aggressive investment option, a financial advice service and flexible member contribution rates. We have also made changes to our investment approach, which is showing signs of improved performance relative to our KiwiSaver peers. Now it’s time for you to let us know how we’re tracking. Look out for an email from Reid Research in September. The email will include a link to the survey, which takes up to 10 minutes to complete. It will include a chance to go into a prize draw to win one of two $200 Prezzy cards.

August is Sorted Money Month – a public awareness campaign coordinated by the Retirement Commission. This year’s activities are built around a single focus of encouraging New Zealanders to set up an emergency savings fund. The Commission says that having an emergency fund brings peace of mind and that “starting, even with just a small amount, brings a significant boost to people’s financial resilience and wellbeing”. Not sure where to start? Read these tips from financial journalist Mary Holm.

The Reserve Bank’s Depositor Compensation Scheme (DCS) came into effect on 1 July 2025. It’s worth noting that the DCS only covers retail deposits taken by banks and non-bank deposit takers such as credit unions, building societies and finance companies. Managed investment schemes like KiwiSaver and workplace savings schemes like the PSS are excluded. These schemes are already subject to robust oversight under the Financial Markets Conduct Act 2013. 

Predicting returns over a single year is always fraught, as demonstrated by Mercer’s periodic table of investment returns. Produced each year, the table colour codes 16 major asset classes and ranks how each performed on an annual basis over the last 10 years. The table illustrates the adage that past performance is not a reliable indicator of future returns.

Employer Superannuation Contribution Tax (ESCT) is deducted from employer contributions before they are paid to PSS. The tax rate depends on your personal income. ESCT is not applied in the same tiered way as personal income tax rates and only one rate applies to the total amount of the employer contribution. Income thresholds for the various ESCT rates changed on 1 April 2025. They have increased by between $2,000 and $10,000 with no change for those earning over $216,001.

Late last year, our administration manager Mercer moved to a login system that uses a combination of a password of your choosing and the email address it has on file. The first time you log in to your account following the change, you’ll be asked to follow a once-only authentication process. First, you’ll be asked to enter your member number, date of birth and the email address you have registered with PSS (your QID email, another Police email or your personal email). Then, you’ll be prompted to set up your security methods: email, password and mobile phone number. This allows for multi-factor authentication which provides an additional layer of security. For example, if you attempt to log in from a new device, we’ll send a verification code by email or SMS just to make sure it’s you. Contact the helpline if you have trouble with the authentication process.

It's been widely reported in the New Zealand media that cost of living pressures have seen a rise in the number of significant financial hardship applications from KiwiSaver members. We’ve noticed a similar trend.

You’ll be aware that, after 3 years’ membership of the scheme, you are entitled to make partial withdrawals from your member’s account subject to certain limits. There is a second benefit still in play that was introduced before the partial withdrawal facility. The in-service benefit allows you to make one withdrawal from your member’s account on reaching age 45 and/or 20 years’ service. However, the limits on these withdrawals are intertwined – they apply across both benefits. Our current policy is that each amount you withdraw under these benefits will be expressed as a percentage of the total amount available on the occasion of that withdrawal. When the aggregate sum of all withdrawals under these benefits reaches 100%, subsequent withdrawals are limited to 5% of your member’s account balance each year. For example, if you meet the criteria for an in-service benefit and have previously made partial withdrawals totalling 60% of your member’s account balance, the most you could withdraw as an in-service benefit is 40% of your member’s account balance.

PSS offers all members (including retained members) access to a limited financial advice service provided by Mercer. Its financial advice team can help with questions about PSS and KiwiSaver, choosing the best investment option for your circumstances, saving for a first home, managing your PSS funds in retirement and more. The team can provide specific advice in relation to your savings in PSS and general information on other types of financial products.

Mercer will ask for proof of bank account before paying a withdrawal unless they already have it on file. If you want a payment made to the same account number but with a different suffix, you will need to provide verification for that account. The evidence needs to show the name the account is in and the bank account number. The simplest way is to take a screenshot from your internet banking or a photocopy of the top of a bank statement or ask your bank to print and sign a verification of account slip. We can only pay benefits into an account in your name (the exception is hardship payments made direct to creditors). This means we cannot pay benefits into family trust accounts, business accounts or accounts in someone else’s name. These rules are about protecting you against fraud. It’s also required by our auditor. 

We will pay your benefit to your legally nominated personal representative(s) if you die while you are an active member of PSS or while you are entitled to a deferred benefit from the scheme. ‘Personal representative’ means the person(s) granted probate (where the deceased left a will) or letters of administration (where the deceased did not leave a will).

It’s never too early – or too late – to start planning for retirement. The Financial Services Council’s retirement planning guide might be a useful starting point to help get you thinking about how you might create an income in retirement.

Most PSS members are also in KiwiSaver. Many choose to take a savings suspension from KiwiSaver, but still top up their account by $1,042.86 each year (around $20 a week), so they qualify for the full government contribution of $260.72. If you’re not already in KiwiSaver, there’s nothing to stop you joining so you can take advantage of this extra money from the government. Read more about PSS and KiwiSaver.