2. General Overview of Year Ended 30 June 2006
2.1 The office's activities have been directed towards:
- discussing particular problems with trustees and their advisers;
- auditing the activities of trustees and their advisers;
- investigating complaints regarding alleged activities of trustees and/or promoters and/or administration managers of registered superannuation schemes;
- assisting the market on ad hoc issues.
2.2 All trustees' annual reports, actuarial reports, trust deeds and trust deed amendments forwarded to this office have been read from the point of view of the Government Actuary's supervisory responsibilities under the Act, and actioned as considered appropriate.
As in previous years, the level of examination varied according to the office's experience of the activities of those involved, and to the nature of the potential issues. The office has placed equal emphasis on the examination of financial matters and on the audit of trust deeds and their amendments, the latter require certification of compliance with the Act.
Annual reports
The Act requires trustees to provide scheme members with a copy of an annual report which contains the information stated in the Second Schedule to the Act. The standard of these reports has, overall, been maintained at an acceptable level. Most reports contain all the information required by the Act. I am pleased to note that the Association of Superannuation Funds of New Zealand continues to promote its Annual Competition on Excellence in Reporting.
The office spends considerable time in ensuring trustees comply with the requirement to file annual reports. The office sends "reminder letters" to the trustees of every registered superannuation scheme. Current practice is to send two letters: the first letter reminds the trustees that an annual report is to be produced (375 posted in March 2006 for schemes with a 1 April 2006 review date, 357 letters posted in March 2005); the second letter informs the trustees that a copy of the annual report has not yet been received (314 letters posted in July 2006 for schemes with a 1 April 2006 review date, 301 letters posted in July 2005).
The reminder letter procedure has generally helped to maintain the timeliness of reports submitted to this office. However, there remains the odd instance where there is an unacceptable delay in sending copies of reports to the office.
Trust Deed Certificates
Trustees, solicitors or administration managers are required to provide certificates of compliance with the Act in respect of every new Trust Deed and Deed of Amendment of a Trust Deed. This is an important responsibility.
From time to time it has appeared that a view was being taken as to interpretation of sections 7, 9 and/or 9A of the Act which was not in accordance with what might be considered an industry consensus. In some instances the office has obtained legal advice to clarify interpretation. We still occasionally receive certificates that have not been given properly in accordance with the Act.
Actuarial reports
The Act requires trustees of certain types of schemes to obtain an actuarial report on the financial position of the scheme at least once every three years. The purpose of this is to provide trustees with an independent report on their ability to pay the benefits promised by the trust deed. A copy of this report is to be made available upon request to scheme members, and a copy is required to be forwarded for the Government Actuary's attention within 28 days of it being received by the trustees.
Generally copies of the actuarial reports have been received by the office within the timeframes specified in the Act. All such reports were examined. Where it was considered appropriate, questions were raised directly with the actuary who signed the report. Appendix 2 contains an analysis of actuarial reports where the date of the actuarial investigation was in the 2005 calendar year.
2.3 All applications for registration of new schemes have been processed within the 14 days time limit specified in the Act.
2.4 All scheme terminations have been checked for compliance with the Act. Section 21 of the Act sets out the statutory responsibilities for trustees when a registered superannuation scheme is to be wound up.
Whilst there continues to be a relatively constant number of schemes in the process of being wound up (currently 55), trustees and their advisers are in the main ensuring that these schemes are meeting their obligations under the Act.
2.5 Approval was given to the reversion of $885,146 of superannuation scheme assets to employers who had sponsored those schemes. No cases are currently under formal consideration, but informal discussions have been held with trustees and their advisers.
2.6 We have received no formal notices this year arising from Section 18A of the Act ("whistleblowing").
2.7 There has been no reversal of the continued fall in the number of private sector employer sponsored superannuation schemes. A number of these have not terminated as such, but have transferred into multi-employer arrangements, reducing administration and compliance costs. Others, however, have wound up and distributed assets to members.
2.8 All complaints have been acknowledged, and an investigation initiated where appropriate, within a fortnight of receipt. Queries and complaints regarding the alleged activities of superannuation scheme promoters and/or trustees and/or administration managers continue to be made to the office (in writing, by telephone, or in person) by scheme members and trustees. Where I have considered it appropriate, these queries and complaints have been investigated using the Government Actuary's powers under section 24 of the Act. My concerns are to determine whether there has been a breach of either the Trust Deed governing the scheme, or the Act.
2.9 The fees charged by the office are as prescribed by the Superannuation Schemes (Fees) Regulations 1992 as amended effective 1 January 2002.
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