The NZ employer-only super fund world continued its inexorable decline last week as one more scheme booked an exit.
According to just-released documents, the defined benefit Whitcoulls Group Pension Fund has formally wound up after its sole member “chose to take a cash payment in lieu of their ongoing pension”.
Defined benefit schemes can be tricky to close but with just one pensioner to placate, Whitcoulls had it easier than most.
Nonetheless, like the other 40 or so defined benefit schemes, the Whitcoulls fund was obliged to roll over into the disclosure-heavy and more expensive Financial Markets Conduct Act (FMC) regime in 2016.
Post the FMA transition, the Whitcoulls scheme reported 37 pensioners under its wings, requiring a total annual company contribution of $242,000 over the 12 months to March 31, 2017: fees took up $37,000 of those contributions; seven pensioners died during the period.
Over the following year, five more pensioners in the scheme died while a further 24 took cash-out option offered by Whitcoulls leaving a single member holding on.
Since 2006, the Whitcoulls fund outsourced management to the BIL (Brierley Holdings) scheme, with whatever investments there were handled by Smartshares.
Both the BIL and Whitcoulls schemes share the same licensed independent trustee, Helen McKenzie, and consultant, Michael Chamberlain.
The NZ national bookshop chain Whitcoulls is owned by the same family interests that control the Farmers department store group.
Gavin Quigan, Financial Markets Authority (FMA) KiwiSaver and superannuation manager, told the Financial Services Council (FSC) conference last year that only two of the 40 extant defined benefit schemes were open as at the end of March 2019.
Quigan said just 20 of the 89 restricted workplace savings schemes remained open as at the same time.
“There are 23 workplace savings schemes with over $100 million and they represent 81 per cent of all beneficiaries,” he said.
A further 13 schemes managed less than $3 million each, Quigan said.
At least one largish employer fund – the $170 million NZAS (formerly Rio Tinto) scheme – could close following a review. The NZAS scheme serves the Rio-owned Tiwai Point aluminum smelter, which itself faces the threat of closure. In January this year, NZAS trustees put the scheme review on hold pending the broader Tiwai corporate call.