The two unions behind the newly-created Maritime Retirement Scheme (MRS) formalised the relationship last week, filing legal documents confirming the amalgamation and transition to the Financial Markets Conduct Act (FMC) regime.
Under the novel arrangement first reported here in February, the Waterfront Industry Superannuation Fund (WISF) and the Seafarers Retirement Fund (SRF) – plus their respective KiwiSaver schemes – have pooled resources to form a $200 million entity.
David Young, who shifts from WISF chair to the same role with the MRS, said the merger was carried out under a special amalgamation clause of the FMC rather than via the more typical bulk transfer method.
“The amalgamation was much simpler to implement [under clause 28, schedule 4 of the FMC] because we didn’t have to carry out a full consultation with members – although we had to keep them informed,” Young said. “In fact, we were doing three things at once: amalgamation, transition to FMC, and changing administrator.”
He said the clause 28 approach would probably have limited application with most super schemes looking at just FMC transition, closing or rolling into master trusts. DLA Piper in Wellington ran the legal process, Young said.
MRS lodged its trust deed and statement of investment policy and objectives (SIPO) on the Disclose website last week, making it the second employer super fund (after the Local Government Superannuation Scheme) to make the FMC transition.
All schemes wishing to continue under the FMC regime have until December 1 to complete the legal changeover.
Young said the MRS scheme would review its underlying investments over the year.
“At the moment we’ve inherited the investments of the two schemes,” he said. “We probably have more fund managers than is optimal over the long term so we’ll be reviewing them over the next 12 months.”
The SRF and WISF traditional super schemes reported funds under management of $63 million and $132 million respectively as at March 31 last year while their KiwiSaver offshoots managed $1.7 million and $7.8 million (both of which invested in the respective underlying super funds).
SRF managers included AMP Capital, Devon, Pathfinder and Nikko while the WISF used AMP Capital, ANZ, Legg Mason, Milford and Standard Life.
While the underlying investments would eventually be whittled down, the MRS structure includes two separate funds – servicing former WISF and SRF members respectively – to retain previous benefits.
However, the related Maritime KiwiSaver Scheme (which invests via MRS) was formed out of full merger of the WISF and SRF products.
The MRS board has 10 trustees including four union appointees and four employer representatives with Young as chair and Joe Fleetwood in the deputy role.
“Simon Brodie has been appointed the Licenced Independent Trustee [LIT] of the new schemes,” Young said.
Melville Jessup Weaver (MJW) takes on administrator duties for MRS, replacing Aon, which provided the service for the two predecessor schemes.
MJW has also recently picked up another former Aon admin client, the approximately $4 million Exclusive Brethren BCF KiwiSaver scheme.
Aon is exiting the NZ super scheme admin business after a deal inked last year with Link Market Services to take up the slack. Link plans to complete any Aon NZ admin client transfers by October this year.