New Zealand Funds Management rolled out a new superannuation product last December, penciling in a pitch at the rebooted UK pension transfer market.
While the NZ Funds Managed Superannuation Service is not currently listed as a qualifying recognised overseas pensions scheme (QROPS), the scheme trust deed sets out details of four UK pension transfer strategies.
Essentially, the UK pension strategies mirror the three NZ Funds lifecycle style funds – income, growth and inflation – offered to NZ members of the new super scheme with the addition of a GPB currency portfolio.
However, the NZ Funds super scheme product disclosure statement (PDS) does not yet allow for QROPS transfers.
David van Schaardenburg, NZ Funds principal, said the manager was in the throes of the QROPS approval process with pent-up demand from its clientbase expected to fuel UK pension transfers into the product.
“We’ve had a lot of queries from existing clients with money in the UK who want to transfer and have asked us to help,” van Schaardenburg said. “And we’ve never felt completely comfortable recommending the other solutions in the market.”
However, he said the new product was more of a “combo” with one eye also on the in-transition NZ super fund industry.
According to van Schaardenburg, with many super funds either shutting up shop or shifting to annuity phase there was scope for a niche player to pick up the slack.
Again, he said the demand was being driven from NZ Fund’s clientbase and associated adviser force, many of whom were looking for post-Financial Markets Conduct Act (FMC) super solutions.
According to the NZ Funds website, the new super scheme is “purpose built to help you save for your retirement”.
“Like our KiwiSaver Scheme, it is made up of three Strategies; the Income, Inflation and Growth Strategies,” the website says. “The allocation to each Strategy is generally determined by a member’s age and risk profile.”
In addition to the pre-set strategies, NZ Funds also offers investors the ability to mix-and-match options.
If NZ Funds does gain QROPS approval it would follow AMP, the Ralph Stewart-backed Garrison Bridge and IVCM schemes as recent arrivals in the previously dwindling field of NZ-based UK pension transfer providers.
The latest official QROPS list includes about a dozen NZ retail UK pension transfer schemes.
Figures published for the first time by Her Majesty’s Revenue and Customs (HMRC) in December last year reveal almost £9 billion of QROPS transfers were paid out globally in the 10 years since the regime’s 2006 inception.
The HMRC data shows QROPS transfers dipped from £1.76 billion sourced from 20,100 individual payments in the 12 months to April 2015 to £1.5 billion (13,700 individual transactions) over the following annual period.
Since 2006 108,700 separate UK pension transfers (the figures may count multiple transactions from some individuals) have been distributed among almost 1,300 QROPS in 40 different jurisdictions. NZ has always been a popular QROPS destination with at least NZ$1.5 billion currently residing in accounts with providers here.
NZ-based QROPS now must comply with the FMC, part of which was tweaked last year to accommodate the local industry.