Where oh where are the KiwiSaver accounts?

Earlier this week we reported that a number of KiwiSaver funds had missed their deadline to prepare and send their annual reports to members. It has transpired that there is a common thread amongst the schemes that missed filing. That theme is the company which provides registry and accounting services to the providers. Yes another three letter name starting with A – AON.

Tuesday, October 4th 2011, 9:43PM 3 Comments

http://www.goodreturns.co.nz/article/976498626/kiwisaver-providers-miss-the-deadline.html

We’ve been told that AON told the providers that everything was okay and “all would be to hand and filed on time after us being on their backs for three months.”

“Only two weeks before the due date we had another urgent meeting with AON and were told that they had received the resignation of the “accountant” who was the problem and had a marvellous plan of how they would meet the deadline. And they didn’t.”

Six months to prepare annual reports is heaps of times.

Trustee Bryan Connor told delegates at the Workplace Savings Conference recently that members should have more current information on their funds.

While some might argue members aren’t particularly interested in the annual reports they do contain good information.

Tardiness like we are seeing that moment does nothing to engender public confidence in the providers.

A good question is what sort of punishment, if any, should the regulators dish out? After all the NZX publicly censures and halts trading in companies that miss deadlines. Shouldn’t the same happen here?

The inequity would be that it is not the providers’ fault, rather the company that provides the registry and accounting service to the providers.

But they do have two of their own KiwiSaver funds.

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Comments from our readers

On 6 October 2011 at 7:59 pm Forthright said:

I can’t imagine how the resignation of a bean counter could cause such a failure as to miss an important reporting deadline. The FMA also seems to portray the view that nothing they are involved in should ever be attacked as a failure, but in this case the FMA is leaving us with the view, almost anything can be defended as not a significant failure. It seems to me the FMA do not appreciate the significance of significant.

It also seems the company that provides the registry and accounting services to the providers has divided loyalties – to the provider and to the fund investors. No matter where the fault is, they will be punished soon enough as investors go elsewhere and they become small enough that they will not need an accountant.

On 7 October 2011 at 3:24 pm denis said:

I don't know what the legislative penalties are, but I think something along these lines would be appropriate:

1. Close the schemes to new entrants immediately,
2. Cancel preferred provider agreements with employers,
3. FMA to conduct an external audit of the accounts, the cost of which is met by the providers in breach,
4. Once that process is finished to FMA's satisfaction, the provider can accept new members again.
5. Provider will have re-register employers with the IRD, which will require them to explain to their customers what went wrong and why.

If the reason for the delays were reasonable, clear and well-meaning - then the provider can trade again and rebuild their scheme and get membership back up. If the reasons are murky then, well, they have a mountain to climb.

On 3 November 2011 at 12:27 am littleton locksmith said:

The inequity would be that it is not the providers’ fault, rather the company that provides the registry and accounting service to the providers.