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Newsletter No. 64 October 2008

Also available as: Newsletter No. 64 [393 kB PDF]

Within this newsletter…

1. Provision of Trustee Annual Reports for KiwiSaver Schemes and Registered Superannuation Schemes

My office has received enquiries relating to the provision of trustee annual reports to members in electronic format. As a result of those enquiries I have sought advice on the issue.

After considering that advice, it is my view that KiwiSaver and Superannuation Scheme trustees are empowered by the Electronic Transactions Act 2002 (the 'ETA'), to meet their respective legal requirements under the KiwiSaver Act and the Superannuation Schemes Act concerning the provision of copies of annual reports to their members, by providing such reports in electronic form and by means of an electronic communication such as email, provided that:

      1. any member who receives the trustees' annual report, in an electronic form and by means of an electronic communication, has consented to doing so;

      2. the integrity of the annual report is maintained throughout the process; and

      3. the annual report is readily accessible by the recipient so as to be usable for subsequent reference (therefore a hyperlink to the report would not meet the requirements of the legislation).

With regard to the requirement for members to have consented to receive the annual report in electronic form, I note that pursuant to section 219(1) of the KiwiSaver Act, a person who gives his or her electronic address to any other person under the KiwiSaver Act is treated as having consented to use, provide, or accept information in an electronic form for all of the purposes of the KiwiSaver Act and the ETA.

As section 219(1) does not draw a distinction between the person to whom the electronic address is given and the person who is actually sending the information, section 219(1) appears to permit the provision by KiwiSaver trustees of their annual report, in electronic form and by electronic means, to those members who have provided an electronic address 'to any other person' under the KiwiSaver Act.

As the Superannuation Schemes Act does not contain an equivalent to section 219(1) of the KiwiSaver Act, Superannuation Scheme trustees must obtain the express consent of their members to the provision of an annual report electronically, or such consent must be able to be inferred from a member's conduct. While it will be up to the trustee to satisfy themselves that consent has been provided (or can be inferred) in any particular circumstance, the following may be sufficient:

  • For existing members who have not expressly consented. Where a member has provided the Superannuation Scheme trustees with his or her electronic address but has not expressly consented to the trustees sending information in electronic form to that address (because, for example, the application form did not include a statement to that effect), the trustees could:


      • (a) email the member seeking express consent to the provision of information in electronic form in the future; or


      (b) email that member, notifying him or her that the trustees intend to provide a copy of their annual report in electronic form to that email address in the future, and asking the member to let the trustees know if they do not want to receive the annual report electronically (i.e. provide the member with an opportunity to 'opt-out'); or


      (c) email a copy of their annual report to that member’s email address, on the basis that the member’s consent can be inferred from the fact that he or she has provided his or her electronic address to the trustees. It may be prudent, in any email attaching a copy of the annual report, that the trustees ask the member to let them know if that member does not want to receive the annual report electronically in the future (i.e. provide the member with an opportunity to 'opt-out');

  • For future members. Ideally the Superannuation Scheme's application form should require the member to provide his or her email address and should clearly state that by providing the trustees with that electronic address, the member thereby consents to use, provide, or accept information or communications from the trustees in an electronic form and by electronic means for all of the purposes of the Superannuation Schemes Act and the ETA.

The information in this Newsletter item is intended to be used as a general guide and does not represent legal advice.

2. Statistics update for Registered Superannuation Schemes

Tables 1 and 2 attached provide an update of appendices 2 and 4 in this year's Annual Report to the Minister.

Comparing the figures in the attached Tables with the relative figures in the appendices to the 30 June 2008 Report:

  • Table 1 shows that the number of registered superannuation schemes continues to fall (from 560 down to 541). The fall can in part be attributed to the continuing movement of employer schemes to multi-employer schemes to reduce compliance costs and the continuing trend of terminations. Rationalisation due to KiwiSaver is possibly now becoming a factor.
  • Table 2 identifies that there is also a continuing decline in membership within private sector employer sponsored schemes. Membership now stands at 288,613 compared with 290,345 in the 2008 report, and 310,741 in 1990.
  • Figures in Table 2 for Employer include data from the multi-employer superannuation schemes operated by various institutions.

3. KiwiSaver Trustee Report Certificates and Statements

It is noted that in some cases trustees of KiwiSaver schemes are substituting their own wording in their reports for the statements and certificates required by s123 of the KiwiSaver Act 2006. As a result the meaning of some statements and certificates has changed requiring my office to seek clarification and replacement certifications in some situations.

For clarity Trustees are asked to ensure that they use the wording for each required certificate or statement that is specified in the legislation.

4. Table 1 REGISTERED SUPERANNUATION SCHEMES: ACCOUNTS SUMMARY AND MEMBERSHIP ANALYSIS


In force on scheme balance dates in the 12 months:
Included in (b):
to 31 Dec
1990 		to 31 March
2008 		Prior period reports Terminating schemes
(a) (b) (c) (d)
Number of Schemes 2,863 541 118 21
ACCOUNTS SUMMARY ($millions)
Opening Balance 11,044 20,940 2,206 126
Add: Contributions 908 2,582 361 8
Investment Accrual 578 600 116 7
Transfers In 0 665 74 0
Other Income 330 -1 0 0
Less: Pension Payments 227 237 27 0
Retirement Lump Sums 481 648 81 5
Deaths/Disablements 49 81 7 0
Redundancies 0 117 20 5
Transfers Out 0 1,848 75 2
Other Exits 764 1,584 132 14
Administration Expenses 112 141 17 1
Insurance Premiums 106 29 3 0
Taxation 90 53 14 0
Closing Balance 11,032 20,048 2,381 112
CURRENT MEMBERS
At start of year 511,940 554,298 42,777 1,496
Add: New members 62,406 42,078 3,519 120
Transfers In 6,765 14,176 986 2
Less: Retirements 13,684 111,750 1,324 20
Deaths/Disablements 2,132 1,625 158 3
Transfers Out 14,171 10,226 1,148 0
Redundancies 0 3,047 198 46
Other Exits 42,929 36,163 1,798 403
At end of year 508,195 547,741 42,656 1,146
OTHER MEMBERS with preserved benefits
3,411
1,575
399
1
CURRENT PENSIONERS 35,747 24,419 1,817 52
TOTAL MEMBERS AND PENSIONERS
547,353
573,735
44,872
1,199

Notes:

1. The data in column (b) includes data for schemes which are presumed current but which have not forwarded their annual reports for the balance date falling in the 12 months ending 31/3/2008; refer column (c).

2. The data in column (b) includes the latest data for schemes which we have been informed will terminate after the balance date falling in the 12 months ending 31/3/2008; refer column (d), which may include some cases in column (c).

3. The data has been obtained from annual reports made by the trustees of superannuation schemes "registered" under the Superannuation Schemes Act 1989 to the members and pensioners of those schemes. Data in respect of the Government Superannuation Fund is not included.

4. Some registered superannuation schemes are "master" schemes, whose members are trustees of other registered superannuation schemes. To avoid double counting, master schemes are excluded from this data.

5. Some registered superannuation schemes are "multiple class" schemes, whose members may be trustees of other registered superannuation schemes. Some double counting may therefore exist.

6. ACCOUNTS SUMMARY The figures for Investment Accrual, Administration Expenses and Taxation are understated: for many schemes the investment figure has been reported net of some expense charge and/or taxation.

7. Beginning in November 1994, amounts transferred in or out from other superannuation schemes, and amounts paid out on redundancy, have been recorded by the Office separately from the amounts paid on resignation, to the extent that reporting by scheme trustees makes the distinction. The figure of "Other Exits" comprises amounts paid on resignation, and in respect of reports filed before November 1994, amounts paid on redundancy and amounts transferred to other superannuation schemes. Similarly, the figure for "Other Income" includes amounts transferred in from other superannuation schemes in respect of reports filed before November 1994.

8. MEMBERSHIP Some double counting may exist in the figures for numbers of members and pensioners: some persons may contribute to, and draw pensions from, different schemes.

9. "Transfers In" and "Transfers Out" refer to persons transferring membership between schemes. These figures do not seem to have been reported correctly. "Other Exits" includes resignation and, in respect of reports filed before November 1994, redundancy.

5. TABLE 2 REGISTERED SUPERANNUATION SCHEMES ANALYSIS BY NATURE OF SCHEME


Number of Schemes
Total Assets
Total Membership
Nature of scheme 2008 1990
2008 		1990 2008 1990
$m
$m
Private 168 508 113
58 		260 550
Employer (1) 270 2,242 12,684
9,508 		288,613 310,741
Retail 103 113 7,251
1,466 		284,862 236,062

TOTAL 541 2,863 20,048
11,032 		573,735 547,353
Investment Only Schemes 26 2 9,952
55 		300 100

1. "Private" schemes are schemes set up by individuals for themselves and their immediate family and include one person employer sponsored schemes.

"Employer" schemes are schemes with more than one member sponsored by private sector employers, public sector employers and all NPF employer sponsored schemes.

"Retail" schemes are schemes where membership is made available to the general public.

"Investment Only schemes" (referred to as Master Schemes in previous years) are schemes whose members are trustees of other registered superannuation schemes.

2. The data has been obtained from annual reports made by the trustees of superannuation schemes "registered" under the Superannuation Schemes Act 1989 to the members and beneficiaries of those schemes.

3. Some totals may not add exactly, due to rounding.



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