What is the Future Fund?

The Future Fund was established in 2006 as a financial asset fund designed to accumulate financial assets and invest them on behalf of the Australian Government to address the Government’s unfunded superannuation liability. This liability arises from the superannuation entitlements payable to some public servants and defence personnel. The Future Fund is overseen by an independent Board of Guardians with support from the Future Fund Management Agency.

The Board of Guardians has subsequently also been given responsibility for investing and growing the assets of three Nation-building Funds - the Building Australia Fund, the Education Investment Fund and the Health and Hospitals Fund.

Where did the money in the funds come from?

Contributions to the Future Fund and Nation-building Funds come from the Australian Government's budget surpluses. The Future Fund has also received contributions resulting from the proceeds of the sale of the Government’s stake in Telstra in late 2006 and approximately two billion shares in Telstra remaining after this sale process.

How is the Future Fund organised?

The Future Fund Board of Guardians (the Board of Guardians) is an independent body that is collectively responsible for making investment decisions and is accountable to the Government for the safekeeping and performance of the assets of the funds. The Chairman of the Board of Guardians is also the Chief Executive Officer of the Future Fund Management Agency, although in practice the operations of the Agency are overseen by the Managing Director.

The Future Fund Management Agency (the Agency) undertakes administrative and operational functions in relation to the funds, and, in particular, acts on the investment directions of the Board. Staff of the Agency are engaged under the Public Service Act 1999. 

How are members of the Board of Guardians appointed?

Members of the Board of Guardians are appointed by the Treasurer and the Minister for Finance and are appointed for up to five years.

Board members are selected on the basis of their expertise in investment management and corporate governance.

View our current Board members here.

What are the investment objectives?

The investment returns expected from the Future Fund are detailed in the investment mandate provided by the Treasurer and the Minister for Finance.

The Future Fund Act 2006 states that the mandate must have regard to maximising returns on the Fund over the long term, consistent with international best practice for institutional investment and other matters considered relevant by Ministers.

The Future Fund Investment Mandate sets a target return of between 4.5% and 5.5% above the Consumer Price Index (CPI) measure of inflation over the long term. The Board has interpreted this as an objective to provide a return of at least 5% above CPI over rolling 10 year periods. The mandate also requires the Board to take an acceptable, but not excessive, level of risk.

Return expectations for the three Nation-building Funds are also detailed in Investment Mandates from Government. The Investment Mandates target a return of the Australian three month bank bill swap rate +0.3 per cent per annum, calculated on a rolling 12 month basis, with investment made in such a way as to minimise the probability of capital losses over a 12 month horizon.

Who decides how to invest assets to meet the investment objectives?

The Board of Guardians, supported by the Agency, is responsible for deciding how to invest assets and operates independently of Government. The Board is guided by the relevant legislation and Investment Mandates.

How are the assets held by the funds currently invested?

Quarterly updates provide details of the progress of the investment program including the asset allocation and performance. The annual report provides information on the the direction of the long term investment program.


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