The KiwiSaver provider list has shrunk again following the decision of another industry-based scheme to shut its doors.
In a newsletter sent to members in January, the tiny New Zealand Harbours KiwiSaver scheme revealed it would close to new members citing “increasing level of compliance costs and the slow growth in membership numbers and asset values”.
David Stevens, NZ Harbours super fund and KiwiSaver board of trustees chairman, said the group would select a transfer scheme for members by early March.
“We’ve got an RFP out to a number of providers,” Stevens said.
He said as well as competitive pricing the NZ Harbours trustee board would look for a transfer scheme that offers investment choice and “good financial advice”.
As at March 31 last year, the NZ Harbours KiwiSaver scheme reported just 140 members and $3.6 million in funds under management (FUM). The scheme has added less than 50 members since its first year of operation over the 2007/8 year where membership hit 83.
Stevens said member growth was minimal despite significant promotional efforts via the Rail and Maritime Transport Union and associated employers.
“The Trustees also recognise that external retail KiwiSaver offerings have accumulated critical mass in terms of assets and member numbers and are, therefore, able to operate with more competitive fee structures,” the NZ Harbours newsletter says. “In addition the retail schemes are able to offer member investment choice options that are not available under the Plan.”
Excluding the $300 million plus Medical Assurance KiwiSaver, industry-based and employer-only KiwiSaver schemes have struggled to build scale since the regime launched in 2007 with the majority winding down.
However a handful of smaller niche funds remain in business including, the Waterfront Industry, SRF (Seafarers Retirement Fund), Douglas Pharmaceuticals, Ravensdown, Tait Communications and two Foodstuffs (understood to be under review) schemes.
Despite giving up on KiwiSaver, the older $78 million NZ Harbours superannuation scheme will continue with a few recent manager changes in train, the newsletter says, including the transition of a global property mandate from Fisher to the AMP Capital Investors Global Infrastructure Fund.
“The Trustees have some concerns regarding the performance of the Plan’s Global Equities and Global Bond Managers, particularly the ANZ (PIMCO) International Bond product,” the newsletter says.