Just under 150 traditional superannuation schemes have been listed as regulation-ready in the latest Financial Markets Conduct Act (FMC) ‘order in council’.
The order in council, which brings into effect legislation, names about 100 stand-alone employer schemes as potential FMC-compliant candidates (with the remainder composed of retail schemes and QROPS funds). However, the final count of employer-only schemes post December 1 this year is likely to lower with several on the legislative list, including the Fonterra scheme, either closed or about to shutter.
Industry insiders have previously predicted about 60 stand-alone employer schemes would survive the regulatory cull instigated by the December 1 FMC compliance deadline.
Meanwhile, the $320 million Fletcher Building Retirement Plan is the latest traditional employer scheme to make the jump to Financial Markets Conduct Act (FMC) compliance.
With the addition of Fletcher, eight stand-alone employer superannuation funds – including the Local Government, Maritime Retirement, NZ Steel and UniSaver schemes – have now officially transitioned to FMC and filed documents on the Disclose website.
Several employer schemes, such as Ravensdown and Fonterra, have already either wound up, merged or rolled into master trusts over the last few months. A number of others are also weighing up their choices.
For example, the almost $160 million stand-alone Air New Zealand superannuation scheme is “carefully considering all options”, according to scheme chair, Stephen Jones.
Jones, also Air NZ chief strategy networks and alliances officer, denied industry rumours that the Air NZ scheme had already decided to roll into the AMP New Zealand Retirement Trust (NZRT) prior to boarding FMC.
“We haven’t made our final decision yet,” he said. “But we will be [FMC] compliant before December.”
Air NZ already uses the NZRT to manage its KoruSaver product, which offers members both KiwiSaver and traditional super options. KoruSaver is understood to have booked assets of about $600 million since take-off in late 2007.
Despite the popularity of KoruSaver, Air NZ continued to offer the traditional super scheme, which has seen membership dwindle below 1,000 in recent years.
The Air NZ super scheme 2015 annual report shows net assets of about $158 million supporting 878 current members (down from 954 the previous year).
Air NZ matches employee contributions to the super scheme of up to 7.5 per cent of base salary or wage.
The Air NZ scheme uses AMP Capital (global shares, domestic fixed income and cash), Harbour Asset Management (Australasian shares), ANZ (property) and the Fisher Funds version of global bond manager PIMCO.
Air NZ’s plight is mirrored by plenty of other employers with the long-time stagnant master trust market already benefiting from the regulatory revamp.
As at the end of 2014 there were 456 registered super schemes in New Zealand, according to Financial Markets Authority (FMA) data published this July, with 247 of those classed as ‘private’ (set up principally for individuals and/or family members). The FMA December 2014 report records 151 employer-only schemes and 58 retail super funds.
In addition to the 456 super schemes, the FMA report tallies eight master trusts, down from 10 in 2013, managing a total of about $5.2 billion at the end of 2014.
However, the June 2016 master trust survey by Auckland-based actuarial consulting firm Eriksen & Associates reports total funds under management in the sector at almost $6.4 billion. While the $2.6 billion NZRT dominates the sector, the NZX-owned SuperLife master trust has accrued a healthy $1.5 billion followed by ASB ($1.3 billion), Mercer ($470 million), Fisher Funds ($447 million) and Aon ($90 million), the Eriksen survey shows.