The NZAS retirement scheme has put the $170 million fund out to tender with a master trust shift on the cards.
Previously known as the Rio Tinto New Zealand Retirement Fund, the NZAS scheme primarily services workers at the Tiwai Point aluminum smelter in Southland.
According to the most-recent NZAS financial statements, NZAS majority owner Rio Tinto is “undertaking a review of the Fund with help from external advisers”.
“The review covers the Fund’s structure and operations, and potential alternative retirement savings platforms,” the NZAS report says.
Rio Tinto, the ASX-listed mining company, owns about 80 per cent of the Tiwai smelter with the slack taken up by the Japanese Sumitomo Chemical firm.
The smelter has a long, sometimes controversial, history in NZ dating back to its launch in 1971. However, the typically well-paid Tiwai workers have built up substantial retirement assets over the years in a generous savings scheme.
Employers contribute 10 per cent of base salary plus 5 per cent of bonus remuneration to the scheme while most employees tip in a minimum 4 per cent of earnings. The scheme also has a life insurance option.
“NZAS contributes $406 million to the Southland economy (6.5 per cent of Southland’s GDP) with export revenue of around $1 billion each year,” the group’s website says. “Approximately 990 full time equivalent employees and contractors work at the smelter.”
Mercer is the incumbent scheme administrator and investment consultant. The current NZAS manager line-up includes: AMP Capital (cash and NZ fixed income); ANZ (global shares); Harbour Asset Management (Australasian equities); Mercer (real assets); and, Nikko Asset Management (Australasian equities).
Tim McGuinness is licensed independent trustee (LIT) for the NZAS scheme. McGuinness was named LIT of the year at the recent Financial Services Council annual conference.
It is understood Melville Jessup Weaver is running the tender process.
NZAS was one of about 80 stand-alone employer schemes that transitioned into the Financial Markets Conduct Act (FMC) environment in 2016.
Gavin Quigan, Financial Markets Authority (FMA) head of KiwiSaver and superannuation, told the FSC conference that a number of stand-alone schemes would likely review their status after three years under FMC rules.
Quigan said four schemes were in train to change, although at least one of those was moving from one master trust to another.