Govt scheme kills fund
The government's State Sector Retirement Savings Scheme (SSRSS) has claimed a $500 million victim.
Tuesday, July 19th 2005, 9:18AM
by Rob Hosking
The $500 million Global Retirement Trust which runs superannuation schemes for a wide range of government agencies, is to wind up at the end of September.
Chairman John Irwin says the closure is due to the SSRSS, which has rendered it “inappropriate and impracticable” for the GRT to continue.
The decision was made earlier this year, general manager Louise Gibson told Good Returns.
However there has been a deliberate policy of keeping the closure low key.
“We didn’t want to make a big song and dance about it. From our perspective we didn’t see it as a good news story and we wanted to go through the process with the scheme members.”
The GRT was set up in 1992 as a not-for-profit organisation by the State Services Commission to provide superannuation schemes to individual government departments following the closure to new members of the Government Superannuation Fund.
It currently has responsibility for assets of about $500 million. Gibson says the schemes it runs have all found a home with other providers. The GRT schemes included the police superannuation scheme (believed to be the largest), as well as schemes for the Inland Revenue Department, Statistics New Zealand, the Ministry for Social Development, and primary and secondary school teachers.
It was the teachers’ scheme which was set up as a pilot for the state Sector Retirement Savings Scheme in 2002 - and it is the SSRSS which has made GRT’s position untenable. In a prepared statement, GRT chairman John Irwin said trustees have been monitoring the impact of the SSRSS.
Irwin cited “lack of capital resources, increasing pressure to cut fees in competition with retail master trust providers and lack of critical mass to be able to offer significant economies of scale”.
“It is now clear that to a large extent the GRT’s purpose and functions have been superseded by the new state sector scheme, and it would be inappropriate and impracticable for the GRT to attempt to compete head-on with it.”
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
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