The New Zealand Defence Force (NZDF) will launch its own KiwiSaver scheme, backed with Mercer investment and technology platforms.
As reported on Investment News NZ (IN NZ) last month, Mercer won the contract to supply investment and admin services to the $355 million NZDF super scheme.
But the NZDF, according to Brigadier Howie Duffy, assistant chief personnel, has much wider ambitions to provide a “one-stop-shop” retirement savings solution to its 14,000-something employees.
Duffy said NZDF staff currently contributes to over 30 disparate retirement savings products, including its in-house super scheme.
“That’s not good enough,” he said. “We want to create a compelling superannuation offer for our people.”
As part of the deal, the existing NZDF staff super fund will close to new members, with all new employees to be auto-enrolled in the new KiwiSaver scheme.
“We’ve got about $355 million in funds under management [FUM] in the NZDF scheme – which makes us one of the biggest two or three left in the country – but membership is declining,” Duffy said.
He said many of the existing 3,700 NZDF super fund members may switch to the new KiwiSaver product as the incentives (including the $1,000 ‘kickstart’ payment) become clear.
“We also get about 1,000 new employees every year who will be auto-enrolled – and that’s a pretty good growth engine,” Duffy said.
NZDF family members could also be allowed to join while exiting staff members – a source of attrition in traditional super funds – will be able to keep contributing to the new KiwiSaver product.
He said NZDF total FUM could quickly grow over $1 billion, “giving us purchasing power we can use to good effect”.
As well as investment and admin services, Mercer will also provide financial literacy training and front-end technological solutions (including a smartphone app) to NZDF KiwiSaver members.
Duffy said the NZDF is going through the KiwiSaver licensing process now with the new scheme likely to be operational before the end of this year.