The sale of Aon’s super administration business to Link Market Services has fast-tracked the review of the Staples Rodway KiwiSaver scheme, according to Graham Duston, head of Funds Administration NZ (FANZ).
FANZ, the investment and advisory arm of SBS Bank, took over the management of the $55 million Staples Rodway scheme in March this year. Aon administers the Staples Rodway KiwiSaver as well as a raft of other, mainly smaller, schemes.
Duston said while the Staples Rodway scheme was scheduled for a review, Link’s acquisition of Aon’s super admin arm “brought our planning forward”.
“[The sale] took us by surprise really,” he said.
The review of the Staples Rodway scheme was still in progress, Duston said, but a decision on its fate was imminent. According to industry sources, the most likely option would be to merge the Staples Rodway scheme with the approximately $150 million SBS-owned Lifestages KiwiSaver fund.
Meanwhile, the final closure of the NZX-owned Smartkiwi scheme has hit a snag with 12 members stuck in limbo pending a decision from the UK tax department.
In a letter sent to the 12 Smartkiwi members last week, Aaron Jenkins, NZX head of funds management, outlined the group’s plans to transfer the bulk of the roughly 1,370 members to the SuperLife KiwiSaver. The NZX bought SuperLife last year in a deal that could cost the stock exchange operator up to $35 million.
However, recent changes to the UK tax rules on Qualifying Recognised Overseas Pension Schemes (QROPS) – which essentially excluded all KiwiSaver schemes as recipients – meant the dozen Smartkiwi members would remain stranded in the scheme.
“Smartshares will not be transferring you to the SuperLife KiwiSaver scheme, because you have previously transferred money from a UK pension scheme into a KiwiSaver scheme,” Jenkins says in the letter.
The NZX had sought exemption from HM Revenue and Customs (the UK tax office) to allow the 12 QROPS exiles to transfer out of Smartkiwi without incurring penalties that could take more than half of the members’ funds.
“We have yet to receive a response from HM Revenue & Customs,” Jenkins says in the letter.
In a well-flagged move, the remaining Smartkiwi members would be transferred to SuperLife pending approval from the Financial Markets Authority (FMA).
Under the FMA bulk transfer rules, the terms and conditions of the receiving fund must be “no less favourable to transferring members” than the original KiwiSaver scheme.
Jenkins says in the letter while “there are many similarities between the two schemes”, SuperLife offered wider investment choice and better member communication that Smartkiwi.
Until the UK tax issue is resolved, however, Smartkiwi would have to remain operating, an NZX spokesperson said.