In what would be the first new KiwiSaver to launch in almost two years, Whai Rawa, the funds management arm of South Island iwi Ngāi Tahu, could roll out a branded scheme early in 2018, according to group’s executive director, David Tikao.
Tikao said following a two-year review process instigated by parent group Te Rūnanga o Ngāi Tahu, Whai Rawa called for expressions of interest (EOI) last week from providers able to offer a ‘white label’ KiwiSaver product and broad investment choice to scheme members across any new and existing funds.
Launched 11 years ago, the $64 million Whai Rawa savings scheme is currently managed by Mercer under a single conservative investment mandate. Set up as a ‘whole of life’ savings scheme, Whai Rawa offers its 24,000 iwi members matched contributions as well as the ability to withdraw funds for education, first home purchase, or retirement (post age 55) purposes.
“We’ve put the whole thing out to tender,” Tikao said. “We may not go ahead with it – our parent may decide it may not be good use of money – but we’re fully committed to exploring the strategy.”
He said the (EOI) letter was sent to about “half a dozen” providers – including incumbent Mercer – with a deadline for response of December 8.
The EOI letter says the Whai Rawa board expects to table its recommendations to Ngāi Tahu parent body early in 2018.
“It is possible that [Ngāi Tahu] may not proceed with the recommendation,” the letter says.
However, if approved Whai Rawa, which was granted a managed investment scheme licence under the Financial Markets Conduct Act last September, would move quickly to implement, Tikao said.
He said following any changes the iwi group would likely retain the existing scheme “for the unemployed and children” while encouraging working members to shift to the proposed KiwiSaver fund.
To date, Whai Rawa has signed up just under half of its 59,000 registered tribal members in the savings scheme. Tikao said a recent member survey showed a “higher than the national average” KiwiSaver participation rate among the Whai Rawa population.
“If whānau already have a KiwiSaver fund we will have to make our offer better than their current schemes,” he said, with potential options including Whai Rawa covering all costs and investment expenses.
Whai Rawa was also in talks with the Financial Markets Authority about offering financial advice to members, Tikao said, although no plans were yet in place.
Any scheme rejig would probably involve updating fund administration processes, which are structured around individualised member accounts linked to the underlying Whai Rawa unit trust.
“Currently the fund pricing is by way of ‘quarterly interest rate setting’ and is not unitised,” the EOI letter says. “This fund unitisation will need to be addressed in the near future.”
Tikao said the Whai Rawa board waited until chair Kristen Kohere-Soutar – appointed as Mercer NZ director in August – formally left this month before issuing the EOI.
Partly to fend off any conflict of interest issues, another director, high-profile financial adviser Martin Hawes, also resigned from the Whai Rawa board this September. Hawes advises the Forsyth Barr-owned KiwiSaver scheme, Summer.
“We’re recruiting for new board members now,” Tikao said.
If it goes ahead, the Whai Rawa scheme would be the first new KiwiSaver to market since Simplicity launched in August 2016.