The Local Government Superannuation Scheme (LGSS) has become the first traditional employer-based fund to officially join the new regulatory regime after lodging its documents on the Ministry of Business, Information and Employment ‘Disclose’ website last week.
Under the Financial Markets Conduct Act (FMC) due to come into force this December all savings schemes – including restricted funds like LGSS – must publish a range of documentation on Disclose such as the new product disclosure statement (PDS).
LGSS, operated by Local Government financial services subsidiary Civic Assurance, manages over $200 million across its old-school workplace savings scheme and KiwiSaver fund under the ‘Supereasy’ brand.
Following the move, the Supereasy KiwiSaver and traditional employer schemes, which previously operated under an umbrella trust, have been legally separated.
The two LGSS entities bring the total number schemes registered on disclose to 12 with retirement village investment vehicle, Senior Trust, also joining the ranks last week. Senior Trust earned its managed investment scheme (MIS) licence earlier this month, with BT Funds Management the latest to join the MIS club last week.
As a restricted scheme, however, LGSS is to date the only provider on the Disclose scheme list not also required have a MIS licence.
According to Tim Sole, Civic chief, LGSS transitioned early to the FMC regime to coordinate with the group’s March-end reporting date.
“We had to separate the two schemes and it was convenient to do that before March 31,” Sole said.
He said the Supereasy schemes were “well above critical mass” and growing well. According to the March 2015 accounts, the LGSS traditional super and KiwiSaver schemes reported about $66 million and $150 million under management respectively.
Both schemes invest into an underlying mix of mainly passive-style funds provided by AMP Capital and ASB. Melville Jessup Weaver (MJW) is listed as investment consultant to the LGSS schemes.
Sole said the passive investment style and low administration costs have made Supereasy the cheapest KiwiSaver scheme on the market.
As the 2015 Investment News NZ KiwiSaver report found, the Supereasy scheme “reported a nominal decline in fees/expenses over the year, resulting in costs falling from an already low 0.7 per cent to 0.5 per cent”.
The Supereasy products are open only to NZ local government employees.