The $170 million NZAS workplace savings scheme will remain plugged in for at least one more year as it awaits the formal exit of sponsoring employer, Rio Tinto.
As reported last September, NZAS was destined for a master trust transition before Rio announced the following it month it would likely close the Southland Tiwai Point aluminum smelter, whose workforce the fund serves.
NZAS postponed the scheme review pending Rio’s final call on Tiwai. In July this year the Australian resources giant, which owns almost 80 per cent of Tiwai, confirmed the smelter, established in 1971, would be closed.
Stew Hamilton, chief of the NZAS smelter operations, told media at the time: “We will work closely with partners as detailed planning is undertaken to wind-down operations and eventually close the smelter.”
Hamilton said the decision to shut Tiwai was “devastating”.
According to the latest NZAS financial statements, the scheme would “continue to operate until, or near to, the closure of the Smelter”.
“The Trustee understands that it is unlikely that any closure will occur within 12 months of the date [June 30] of these financial statements,” the NZAS report says.
NZAS says in its new product disclosure statement (PDS) the Tiwai shutdown was expected to begin in August next year.
“… the Trustee is working with Rio Tinto to understand possible future wind-down scenarios,” the PDS says.
“The Fund’s long-term position will remain uncertain until after final decisions have been made in respect of the wind-down process for the overall business… The Trustee will continue monitoring developments as information becomes available, and will update members on the anticipated future of the Fund when a final decision on the operational wind-down process is known.”
Advised and administered by Mercer, the NZAS underlying manager roster includes AMP Capital, ANZ, Harbour Asset Management and Nikko Asset Management. The scheme also invests in a Mercer ‘real assets’ portfolio.
Since 2016 when the sector transitioned to the Financial Markets Conduct Act regime, four workplace savings schemes have folded. Several more, however, have shifted to master trusts with the Bank of NZ Officers Provident Fund on track to join the trend with Mercer understood to have picked up the mandate.