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Summary of

SECURITIES ACT (NEW ZEALAND LOCOMOTIVE ENGINEERS' SUPERANNUATION FUND) EXEMPTION NOTICE 1999

SR 1999/326

Gazetted on 30 September 1999

The trustees and employers are exempt from sections 37A(2), 33(3) and 37(3) of the Act and regulation 3(3) of the Regulations in respect of interests in the New Zealand Locomotive Engineers' Superannuation Fund (the Fund). These provisions relate to the statutory supervisor and participation deed and to the minimum amount payable on application for interests in the Fund.

The notice expires on 30 September 2004.

Conditions

The exemption from sections 33(3) and 37(3) of the Act and regulation 3(3) of the Regulations are subject to the following conditions:

• that the trustees are required to
  - comply with section 15 (1) and (2) of the Superannuation Schemes Act 1989 relating to actuarial reports,
  - send a copy of every actuarial report to the Rail and Maritime Transport Union (Inc) after receiving the report, and
  - make a copy of any actuarial report available to members of the Fund free of charge and on request.

• that the Fund has two independent trustees of whom one is a chartered accountant and the other is a barrister or solicitor of the High Court, and each of whom has not less than seven years' practice.

• that the trust deed contains the matters set out in section 7 of the Superannuation Schemes Act.

• that a copy of the trust deed is lodged with the Registrar of Companies for public inspection.

• that the registered prospectus:
  - contains all the information, statements, certificates, and other matters specified in Schedule 3C of the Regulations that apply to the Fund,

  - specifies the date and period of the latest actuarial report for the Fund, and

  - contains a prominent statement that:

  • the Fund is not a registered superannuation scheme, and

  • the Fund is not subject to supervision by the Government Actuary.

• that the financial statements of the Fund are prepared in accordance with the financial reporting standard FRS-32 Financial Reporting for Superannuation Schemes.

• that the administration manager, investment manager, actuary, and auditor of the Fund has complied with section 18A of the Superannuation Schemes Act if they form an opinion that:
  - the Fund is not operating in accordance with this notice, or
  - the financial position, the security of benefits, or the management of the Fund is inadequate.

• that for the purposes of the preceding condition, sections 18A and 18B of the Superannuation Schemes Act apply as if the Fund were a registered superannuation scheme and every reference in those sections to the Government Actuary were a reference to the Registrar of Companies.

• that no member of the Fund incurs any liabilities as a result of the Fund not being a registered superannuation scheme.

Effects of the exemption

The exemption enables the scheme, presently known as the NZ Locomotive Engineers' Superannuation Fund, to register a prospectus as though it were a registered superannuation scheme if the scheme's registration under the Superannuation Schemes Act is cancelled.

Reasons

The trustees propose to amend the trust deed. This is expected to lead to the cancellation of the scheme's registration under the Superannuation Schemes Act even though, in the view of the trustees, this will be beneficial to the members of the scheme. The scheme has operated for a long time as a superannuation scheme with a trust deed and board of trustees and will continue to operate in much the same way.

The composition of the board of trustees is weighted towards representing the members of the scheme. Two independent trustees are appointed by the union-member and scheme-member trustees. The independent trustees are required to be a chartered accountant and a solicitor each with at least seven years' professional experience.

The trustees will continue to prepare a registered prospectus complying with Schedule 3C to the Regulations as though the scheme were a registered superannuation scheme. The conditions of exemption ensure that actuarial reporting will continue and that the actuary's reports will be made available to the union. As well, some of the other disclosure and protection mechanisms provided by the Superannuation Schemes Act will continue after the scheme is de-registered under that Act.

The Commission accepted that it was appropriate in this particular case that the scheme should be free to register a prospectus, for the purposes of securities law, as though it were a registered superannuation scheme.