Newly-minted superannuation scheme, Garrison Bridge, has passed its final regulatory hurdle after joining the list of NZ-based qualifying registered overseas pension schemes (QROPS).
Garrison Bridge – a joint venture between the Ralph Stewart-headed Lifetime Asset Management and Christchurch advisory firm First Capital Financial Services – earned its QROPS status early in December, the company said in a release last week.
Stewart said Lifetime, which also acts as manager for the two recently-restructured IVCM QROPS, was well-placed to take advantage of expected strong migrant flows from the UK to NZ.
“The local QROPS market has been in a state of disruption, partly due to new positive improvements in NZ legislation and ongoing UK changes,” he said in the statement. “Our position as long term retirement income specialists allows us to support multiple options for QROPS transfers and investors switching from current schemes.”
Garrison Bridge follows on from the AMP New Zealand Retirement Trust (which launched a UK pension option in July this year) as a new entrant in the increasingly-regulated QROPS market. The potentially-lucrative QROPS sector in NZ has faced a raft of tighter rules both from the UK tax department and through the Financial Markets Conduct Act (FMC) regulations.
While last-minute regulatory tweaks have eased the FMC transition for some NZ-based QROPS schemes, the current UK tax department list (which is yet to add Garrison Bridge) includes less than 10 retail providers. The bulk of the NZ QROPS list features vehicles for individuals (mostly housed under the ‘SSAS’ range) and several oddball operations.
The NZ government-owned GMI (Gareth Morgan Investments) was one notable absence from the list with its superannuation scheme recently dropped from the QROPS register.
Britannia is the largest of the major NZ QROPS schemes operating under FMC conditions with about $520 million under management across its – now-closed – two products. (Like some other providers, Britannia has slated a new FMC-compliant scheme, the Britannia Retirement Trust, for launch.)
The Fidelity Super-Super 3 fund (now managed by Booster) is not far behind Britannia with just under $500 million under management followed by the $207 million i-Select scheme, which is popular with financial advisers. Meanwhile, both IVCM and the Superlife UK pension scheme (formerly known as Ascot) report about $30 million under management.
Other QROPS providers include the Medical Assurance Society, Craigs Investment Partners and the Saturn Portfolio Management-owned Portfolio Superannuation Fund (previously part of the van Eyk Blueprint group), with funds under management of about $555 million, $245 million and $70 million in their respective superannuation products. However, it’s unclear how much of the previous three schemes’ funds are sourced from UK pension or other NZ-based sources.
Curiously, the NZ QROPS list still includes the GBP International Superannuation Scheme, which was forced to freeze redemptions last year after its eco-themed underlying investments ran into trouble.
In July this year one of the $3 million GBP schemes two underlying investments – the New Earth Recycling and Renewable Energy fund – was wound up. GBP’s other investment, the bamboo plantation-focused Eco Resources fund, remains in limbo pending last-ditch attempts to secure finance.
According to the latest NZ government Order in Council, the GBP International fund would transition under FMC as a ‘restricted legacy scheme’.