Axa New Zealand Launches New Superannuation Scheme
Axa New Zealand Launches New Generation Superannuation Scheme
The launch of AXA Business Superannuation (ABS) will accelerate the decline of traditional stand alone employer superannuation and introduce a new era of flexible business superannuation, says AXA Chief Executive Ross McEwan.
"Over the last decade, stand alone schemes have declined in number by 58%, from 2,242 schemes in 1990 to just 943 in 1998. Companies no longer want to take on trustee responsibilities or operate relatively inflexible company-only schemes.
"Today, business owners want schemes which offer greater investment and fund management choices for members. We believe the traditional market will continue to decline, and demand for more effective master trusts will climb from $2 billion under management now to at least $3.2 billion by 2003,"says Mr McEwan.
By providing a ready-made administration, trust and funds management structure, master trusts enable employers to share the cost of operation with other companies in the scheme. They also typically provide a wider range of funds management options for members.
For employees, ABS is a new generation of master trust, leading the market with extensive choice and flexibility, particularly in the depth and range of the 28 investment options it makes available.
Employees can either invest in one of several ready-made diversified asset portfolios or select from a wide range of asset sectors to build a portfolio which meets their specific needs. This highlights that ABS caters for a full spectrum of employees - from those wanting simplicity to those wanting a high level of involvement with a sophisticated plan.
A key difference from other master trusts is that savers can choose from a selection of prominent local and international investment managers.
ABS was developed in association with the superannuation market.
"We've acted on what key market players, such as asset consultants and financial planners, are saying. ABS incorporates the package of features and benefits required to meet the rapidly growing demand for business master trusts," says Mr McEwan.
"Our strategy is to lead the master trust market. We will only do that by producing smart solutions which are a long jump ahead of the competition. That's where ABS is positioned."
The launch has been timed to meet growing demand, which AXA believes will exceed 20% growth per annum over the next three years. The flexibility of ABS will enable it to meet the Government's recently announced changes to the superannuation contribution withholding tax and to the new lock-in provisions.
"What we are seeing in the market now is two trends. Transfer of funds to efficient master trusts from the closure of less efficient employer administered schemes, and increasing focus on tax- efficient superannuation options," says Mr McEwan.
ABS will stand up to the market's critical scrutiny because it has been designed with the built in flexibility required to meet market expectations, both now and in the future."