by Rob Hosking
GRT was one of the four original providers picked to service the mammoth superannuation scheme, which is targeted at the core public service and teachers, but withdrew at the end of March.
GRT cited unspecified rule changes by the State Services Commission when it withdrew. It is understood that those rule changes amounted to allowing the other providers to market their other financial products along with superannuation.
Mallard says GRT “probably underestimated the work that was involved in promoting to a broader group and in a more competitive situation.
“They're obviously a smaller organisation., and probably comparatively …I think its fair to say they in the end made a call that they weren’t capitalised to compete with the others. They decided to focus on areas where doing very well already.”
GRT has specialised in providing superannuation to state sector employees and carried out the pilot scheme for the SSRSS, for primary school teachers.
GRT chief executive Louise Gibson takes issue with some of Mallard’s comments.
“We are a not-for-profit organisation and we don’t have a huge pot of reserves. But I would disagree in that we went into this very clear eyed: we know this market well and we knew what we were in for. But things changed during the evolving development of the scheme.”
GRT, which also provides existing superannuation schemes for government departments such as the Inland Revenue, Statistics, Police and Social Development, and Mallard says those existing schemes can co-exist alongside the SSRSS.
He denies that some departments are encouraging staff to change to the new scheme, despite an internal State Services Commission memo which says that is going on.
However, he went onto say that “One of the advantages the arrangement is there’s a reasonable amount of flexibility, minimal cost to change, and that will mean that over time people will make some changes in various directions. There is quite a large market though and I think that there’s a big enough pool for everyone to play in.”
The government is still looking at extending the scheme beyond the core public sector to such agencies as the district health boards and universities and other Crown entities - some of which particularly in the first two groups, have large numbers of staff.
That is still a couple of years off, says Mallard, as is any moves to extend the employer subsidy above 3%.
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
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