Category Archives: Private Super Schemes

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Private and Employer Managed Superannuation Schemes

Despite the introduction of Kiwisaver there are still 457 private or Employer Managed Superannuation Schemes, with 380,000 members in NZ. Between them they have funds of approximatley $20 billion and are a small, but significant, component of the New Zealand retirement income scene.

A handful of schemes have transferred into a Kiwisaver type, where funds are held in ‘lock-in’ accounts for individual members and have a similar degree of protection as Kiwisaver.
The majority of other schemes are based on commercial realities and, with a few exceptions (mainly from Government Service organisations such as Defence, Police, Local Government etc., have no mechanism for beneficiary’s or contributor’s views to influence investment or management of their funds.

The Financial Markets Authority has a statutory duty to oversee Employer and Private Superannuation schemes, and produces an excellent overview of the whole industry each year, including ensuring that a proper annual report is submitted. However FMA’s report does not identify individual scheme’s annual reports, which can only be accessed by going through the Companies Register “Superannuation’ subset search (tick superannuation and at next screen enter ‘Superannuation to the right of  ‘contains the words’).

There appears to be no public discussion of whether the Private or Employer Managed Superannuation Schemes are doing a good job and whether members are satisfied with their management.

I post this information to encourage those belonging to such schemes to give feedback on their experiences or thoughts.

Information sourced from the FMA site and interpretations and comments are my own.

Stephen Wealthall

Kaspanz Chair Makes Sunday Star Times

Don’t panic on pensions

ROB STOCK

Sunday Star Times Oct 13th, 2013 D1, D5

Fears of a massive unaffordable pensions blowout in future may be easing as analysis suggests a sustainable solution is achievable.

Measures proposed by the Retirement Commission are estimated to cut the cost of NZ Super to about 6.5 per cent of GDP by 2060 – a level seen as costly, but affordable.

Retirement Commissioner Diane Maxwell said the measures were designed to be the last big changes needed to make the universal state pension sustainable in the face of an ageing population.

Her comments follow analysis from the University of Auckland’s Retirement Policy and Research Centre showing a consistent decline in Treasury’s estimates of the future cost of NZ Super.

14 treasury models

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On Wednesday in the Focusing on the Future report the Commission for Financial Literacy and Retirement Income proposed progressively raising the age of eligibility for NZ Super (currently $21,336.64 before tax for a person living alone) as life-spans increase. Continue reading