Investment News NZ (IN NZ) understands Aon Hewitt has sold its superannuation and KiwiSaver fund administration business to a new entrant in the New Zealand market.
According to industry sources, Aon has been in discussions with the unidentified purchaser for the last nine months with a deal – that may also include the group’s KiwiSaver and master trust schemes – signed off in the last couple of weeks.
Janet Hayden, Aon Hewitt general manager, denied a sale had been completed. However, she said the group was constantly reviewing business operations.
“We’re part of a global firm that looks at opportunities across the whole business all of the time,” Hayden said.
Aon’s Australian division exited the super admin business in 2008, outsourcing the role to industry mega-provider Pillar Administration.
According to the Aon NZ website, the group “administers 60 schemes including 22 KiwiSaver Schemes, 9 Complying Superannuation Funds and 14 Defined Benefit Schemes”.
“The schemes administered have a combined membership of approximately 120,000 members,” the Aon site says.
In a submission to Treasury in 2010, Greg Lee, Aon principal, cited the exact same number of schemes on Aon’s books. At the time Lee noted the Aon-administered funds represented 60,000 members and about $2 billion.
However, the sector is coming under increasing pressure as KiwiSaver scheme consolidation and Financial Markets Conduct Act rules affecting employer super funds reduce the number of clients.
For example, fertiliser firm Ravensdown shuttered its KiwiSaver scheme this year while also rolling its employer super fund into an AMP master trust.
Aon also runs a KiwiSaver scheme, boasting about $250 million and over 19,000 members as at last March. At the same date, the Aon Master Trust reported $113 million under management, up from $107 million the previous year but significantly down on the 2012 figure of $205 million due to Milford transferring its-then $118 million KiwiSaver fund into a stand-alone scheme.
Sources close to Aon said the group would probably sell the KiwiSaver and master trust funds along with the administration components.