Commissioners for the Reduction of the National Debt - Investment Accounts
National Insurance Fund Investment Account
This Fund, which dates in its present form from 1975, is by far the largest of those managed by CRND. The Social Security Acts of 1973 and 1975 established a new Scheme of social security contributions and benefits, replacing the National Insurance Acts and assimilating the Industrial Injuries Acts. Under the 1973 Act, two separate funds previously comprising the National Insurance (Reserve) and the Industrial Injuries Funds were wound up and their assets transferred to the National Insurance Fund (NIF) on 1 April 1975.
The NIF is intended to be the 'current account' of the National Insurance Scheme, holding sufficient funds to even out fluctuations over time in the movement of contributions and benefits and to provide a source of finance to meet exceptional demands, for example in times of high unemployment or a sickness epidemic. By virtue of section 161(3) of the Social Security Administration Act 1992, HM Revenue and Customs (HMRC) transfers money to the Investment Account on days when it has a net inflow of cash and draws from the Investment Account on days when payments exceed receipts.
Following a review by HMRC, HM Treasury and CRND, a change to the NIF investment strategy was approved in December 2006. This change has resulted in lower administrative charges to the NIF. The change was effected in January 2007, when all the Investment Account’s gilt holdings were sold and the proceeds placed into the Debt Management Account Deposit Facility. Since then, the earnings of the Investment Account have been much more closely aligned to the Official Bank of England Rate (Base Rate).