The Medical Assurance Society (MAS) is poised to open up its close to $1 billion KiwiSaver scheme to the wider retail market after earning a managed investment scheme (MIS) licence this month.
Mike Davey, MAS chief member advocacy officer, said the mutual organisation planned to “begin public promotion of our retail KiwiSaver scheme from mid-June”.
“For MAS, the new licence supports our ambition to grow in the New Zealand market as we celebrate our 100-year anniversary, particularly with those that want their insurance and retirement savings to make more of a difference,” Davey said.
MAS, which operates the largest by far of the five ‘restricted’ KiwiSaver schemes, was granted a MIS licence by the Financial Markets Authority for the Medical Funds Management entity.
As a special licence condition, the regulator says: “Medical Funds Management Limited must maintain the same or better standard of capability, governance and compliance as was the case when the FMA assessed its application.”
While MAS has held the Medical Funds Management entity since 2010 it was not licensed by the FMA until mid-May this year. MIS licensing is the first phase before launching a fully-fledged retail investment scheme such as KiwiSaver.
Last February MAS also created a new range of wholesale investment funds, appointing Public Trust as supervisor. Restricted schemes are not required to use licensed supervisors, which add another layer of cost and compliance.
Former Public Trust head of investments, Colin Thomson, joined MAS in a similar role in 2017.
The long-established MAS has offered a range of financial services to the NZ health industry for decades, adding a KiwiSaver scheme in 2007 that closely followed its existing superannuation fund.
“Currently, our investment products have a combined membership of nearly 18,000 with more than $2 billion in funds under management,” Davey said.
As a restricted scheme MAS can only market products to a defined audience – in this case, primarily NZ health industry employees and their families. However, the MAS restrictions are reasonably loose with the scheme able to accept a broad range of other professionals – including vets, lawyers, accountants, architects, engineers and others approved on a case-by-case basis at the “complete discretion” of the trustees.
Of the $2 billion plus held in the MAS KiwiSaver, traditional super scheme and insurance funds about half is invested in global shares. MAS uses JB Were as the underlying investment adviser with an environmental, social and governance (ESG) overlay introduced in 2017. According to the latest MAS fund update, the scheme excludes Apple, Facebook and Amazon on grounds of “serious controversies” while it highlights “notable inclusions” of Tesla, Microsoft and Taiwan Semiconductor Manufacturing.
With over 15,000 members the MAS KiwiSaver scheme dwarfs the other four restricted players, comprising: the local government specialist Supereasy (about 9,000 members); Christian (2,000 or so); the Restricted Brethren BCF (approximately 700); and, Maritime (300ish).
Despite its solid growth since inception, the MAS KiwiSaver scheme has plateaued over the last couple of years with a slight net member decline over the 12 months to the end of March 2020.
The restricted scheme rules came in with the 2013 Financial Markets Conduct Act (FMC). Prior to the FMC, the MAS scheme was open to the broader public.
“We’re looking forward to welcoming more Kiwi’s into our KiwiSaver scheme soon,” Davey said.