KiwiSaver providers miss the deadline

The Financial Markets Authority is weighing its options after a handful of KiwiSaver providers missed their annual reporting deadline.

Monday, October 3rd 2011, 7:28AM 7 Comments

by Niko Kloeten

KiwiSaver providers who report for the year to March had to file their annual reports by last week but despite having nearly six months to prepare, some didn't make it on time.

Elaine Campbell, head of compliance monitoring at the FMA, said that of 44 KiwiSaver schemes with March 31 balance dates, five did not meet the 28 September reporting deadline.

"Of these, we are told two are in the post. The other three are from a single provider, which is keeping FMA informed regarding its reporting progress.

"The provider has experienced delays in producing financial statements that show the segregated nature of the investment funds within each scheme it manages."

Although the FMA did not divulge the identity of the provider having problems with its financial reporting, Good Returns understands the main retail manager to miss the deadline is Aon.

"FMA will treat each case on its merits," Campbell said. "In the event of a serious breach of an issuer's reporting responsibilities, the first step would be to investigate under the FMA Act to identify the issue.

"Consideration could then be given to charges under the Kiwisaver Act, which sets out the penalties for an issuer failing to meet its reporting obligations."

Niko Kloeten can be contacted at niko@goodreturns.co.nz

« News Round Up: October 3

Canterbury advisers achieve AFA status »

Comments from our readers

On 3 October 2011 at 9:35 am Independent Observer said:

My previous claims that Kiwisaver will be the industry’s next "Finance Company debacle" are supported when you read articles like this.

I'm unsure why the FMA is "considering" options, when the obvious choice is to close non complying Kiwisaver providers immediately, and redirect the funds to a default provider.

On 3 October 2011 at 10:27 am Sarah said:

I'd like to know who the KiwiSaver providers are, as it makes you wonder about their other processes.

On 3 October 2011 at 12:47 pm Murray Weatherston said:

Why shouldn't a Kiwisaver provider who had failed to meet their reporting requirements be required to withdraw its prospectus and investment statement i.e. be prevented from raising any more money until they fix the breach and tell all their members that (a) they were in breach but (b) they had fixed the breach?

Shouldn't the liability to report be a strict liability i.e. there are no merits that should ever be taken into account; miss the deadline means you are off the market. Or is the perpetrator "too big or too important to fail?"

On 3 October 2011 at 11:46 pm Forthright said:

I can’t understand why Simon Power or Sean Hughes would allow participants to ignore the rules. How will this approach assist the restoring of confidence in the NZ retail financial market?

On 4 October 2011 at 9:28 am Collin said:

Reporting the fact but not acting on it sends a weak message to the industry and the investing public. Six months is more than enough time to prepare the annual report. Name and shame is the way to go. Providers who are lacks with the rules are more than likley to take a similar approach with members. Members should be informed of the providers involved via public announcement and have the opportunity to review the provider entrusted with their hard earned savings.

On 4 October 2011 at 10:29 pm What Now said:

What do we expect? The line was set when Huljich directors John Banks and "Dopey" Don Brash were let off being charged when the then Securities Commission alleged that misleading and false statements were made in the Huljich registered prospectus. Why were they completely let off while Nathan Directors went to Jail for false statements in a prospectus?
Very selective our regulators...the stench is overwhelming. I note that Sean Hughes says the FMA is keen to clear the "stench" created by the collapse of the finance company sector. The collapse couldn't have been due to poor regualtion could it? No of course not. It was just the advisers.

On 5 October 2011 at 6:24 pm Peter said:

Name and shame! Let's see what excuses they then offer.

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