Superannuation scheme numbers held steady over the 12 months to December 31, 2014, despite membership falling by over 18,000, new Financial Markets Authority (FMA) statistics reveal.
According to the FMA statistics, released last week, there were 456 registered super schemes as at the end of 2014, just one less than the previous year. Total scheme membership fell from 381,135 to 363,123 while assets under management rose from about $20.7 billion to $22 billion over the annual period.
However, the apparent steady-state scheme numbers mask a slight switch in composition, with employer-sponsored funds dropping from 156 to 151 during 2014 as ‘private’ schemes – mostly single-person super funds – increased from 243 to 247. The FMA data records 58 retail schemes operating in both 2013 and 2014, representing over $5.5 billion in funds under management (compared to almost $16.3 billion in employer schemes).
But the 2014 figures mark only a brief halt in the ongoing decline of the super sector with 24 schemes – including 15 private, six retail and three employer funds – officially earmarked for demolition in 2015. The ‘terminating schemes’ statistic, published in the FMA summary, would understate the true number of super fund closures during 2015 with the full impact of the Financial Markets Conduct Act (FMC) expected to hit the sector over the last quarter of the year.
Super schemes face onerous new compliance duties and costs under FMC rules, due to be fully-implemented by December next year, with many now deciding either to bail out or roll into master funds. For example, last month the $100 million plus Fonterra super fund closed shop while two other rural service firms – fertiliser supplier Ravensdown and meat processor Alliance Group – earlier tipped their respective stand-alone schemes into master funds.
The FMA statistical report lists eight master trusts – down from 10 the previous year – that collectively managed almost $5.2 billion on behalf of 51 underlying schemes as at December 31 last year.
To date, AMP’s NZ Retirement Trust (NZRT) has been the main beneficiary of increased super scheme rollover activity, with the master trust reporting a massive increase in transfers over 12 months to June 30 this year. According to the latest NZRT accounts, almost $560 million poured into the master trust during the latest reporting period compared to just $721,000 the previous year. Total NZRT assets hit almost $2.5 billion as at June 30, up from about $1.8 billion in 2014.
Only 69 of the 456 registered super schemes as at December last year reported assets under management above $50 million, the FMA statistics say, including 46 employer schemes and 23 retail products. Of the remainder, 140 schemes had funds under management below $500,000, the FMA figures show.
The FMA statistics were supplied in lieu of a full sector report (now only required for KiwiSaver), which was no longer required following the repeal of the 1989 Superannuation Schemes Act last December. Super schemes are now governed by the FMC.