The NZ corporate superannuation master trust market has recorded solid growth in the June quarter to hit $8.5 billion in funds under management, according to the latest EriksensGlobal report on the sector.
“Total Master Trust FUM rose by $294 million over the quarter due to positive asset returns and member contributions,” the Eriksens survey says. “Those funds with a higher proportion of growth style assets (eg shares and property) had the highest investment returns.”
All of the six providers covered in the Eriksens report saw similar relative growth over the June quarter with no change in the rankings.
The AMP NZ Retirement Trust (NZRT) retains the number one spot with over $3.4 billion in FUM as at June 30 followed by the NZX-owned SuperLife in second place (almost $2.4 billion).
Outside of the top two players only ASB ($1.5 billion) has much scale in the stagnant market: Fisher Funds and Mercer report June 30 FUM of $543 million and $507 million, respectively, while Aon edged up to $175 million at the same date.
Corporate superannuation has fallen out of favour since the introduction of KiwiSaver and the Financial Markets Conduct Act (FMC), which imposes tough new obligations on employer-based retirement savings schemes.
While master trusts benefited somewhat as employer-only funds rushed to the exit post-FMC, the sector survives largely on a, declining, member base and investment returns rather than organic market growth.
Nonetheless, the corporate master trust business can still be a lucrative venture for at-scale incumbents. The NZRT, for instance, generated total fees and expenses of about $32 million over the 12 months to March 31 last year.
SuperLife and ASB reported total master trust fees of about $4 million and $6 million, respectively, for the 2018/19 financial year.
Despite the seemingly placid nature of the NZ master trust sector over the June quarter it is understood a number of employer contracts are up for review – notably the $1 billion plus Air NZ super/KiwiSaver gig currently held in the AMP NZRT.
Sources suggest a number of other NZRT employers have also put the job out to tender this year.
The Air NZ ‘KoruSaver’ review was first flagged last year as the group sought a ‘step change’ upgrade to its employee super offering. However, the airline has yet to announce a decision.