The Bank of NZ Officers Provident Association (OPA) has confirmed Mercer as its new investment scheme manager, transferring assets across to the group’s master trust last week.
As reported here in June, Mercer was the hot tip to pick up the OPA money, in a move that would significantly boost its master trust funds under management (FUM).
According to the 2019 OPA annual report, the scheme held FUM of just over $270 million at the end of October last year. If it all transfers across, the Mercer master trust would grow by more than 50 per cent
The EriksensGlobal quarterly survey of the sector shows the Mercer master trust held about $512 million at the end of September this year.
In a just-released statement of investment policies and objectives (SIPO), the BNZ staff fund says the new OPA Savings Plan was established in the Mercer master trust, effective December 1.
However, the bank will manage a small pool of defined benefit pension money in a separate vehicle.
Ahead of the transfer “notice has been given to the external investment managers named in this… (SIPO)… with effect from 16 November 2020”, the scheme document says.
Prior to the master trust switch, the OPA investment manager roster included Mint Asset Management (Australasian equities), Harbour Asset Management (NZ cash and bonds), Fisher Funds (global fixed income via PIMCO) and Russell Investments for international shares. Russell was also investment adviser to the OPA.
The OPA has been in play since May when the long-standing BNZ staff scheme reversed a 2018 decision to build a new stand-alone employer fund.
Kate Daly, BNZ chief people officer, said in a letter this May that: “Instead of establishing a new workplace savings scheme, BNZ now intends to set up a plan for BNZOPA members within an existing multi-employer scheme [master trust].
“The new plan will mirror your BNZOPA member benefits, but be managed by a third party.”
Several stand-alone employer savings schemes transitioned to master trusts prior to the sector joining the Financial Markets Conduct Act (FMC) regime in 2016: in the years since a handful of others have also gone down the master trust route, citing FMC compliance headaches.
Gavin Quigan, Financial Markets Authority head of superannuation and KiwiSaver told an industry seminar in November that the restricted scheme sector (of which employer funds are the largest subset) shrunk by just one over the most recent reporting period.