KiwiSaver 'bailout' complied with rules: Westpac
In 2011, BT Funds Management invested KiwiSaver funds in Te Rau Aroha Longevity Trust (TRAL) notes to the value of $8.75 million, with a term of 10 years. The notes had a face value of $12 million.
They were designed to provide an income as people whose lives were insured died. The resulting payouts would also fund ongoing premiums. But the scheme hit trouble when that did not happen as quickly as expected and more investment was needed. It is believed that the policies were with AIA.
Instead of providing the cash injection the scheme’s designer says was promised, BT spent $13.2 million buying the bonds out of its Kiwisaver scheme – a move that some are comparing to the bailout Huljich was fined over.
A Westpac spokesman said appropriate processes were followed, disclosures were made and no investors in the fund or any other BT managed fund suffered any loss.
Click the button below to subscribe and will have free unlimited access for a limited time to full article and all other articles on the site.
You will also be able to comment on articles on Good Returns.
