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News Media Backgrounder - Axa New Zealand/ Group


AXA New Zealand is headquartered in Wellington, and has a substantial presence in New Zealand. Chief Executive is Ross McEwan.

AXA New Zealand rebranded in August 1999 and was formerly known as National Mutual which has operated in New Zealand for 120 years.

The new entity, therefore, is a combination of local knowledge and experience and the global resources and experience of the AXA Group.

For example, National Mutual was the first: *provider of a group life assurance plan (1884) *to establish a staff superannuation plan with a retirement pension (1917) *to introduce common premium rates for men and women *to establish a master trust for small business superannuation *Australasian insurer to break into the Hong Kong market (1986) *and the only Australasian funds manager to operate fully in Japan (1989) *and the only Austalasian life insurer operating in Taiwan (1993) *Australasian life insurer to demutualise (1995) *Demutualised life insurer to list on the Australian and New Zealand Stock exchanges (1996).

AXA New Zealand currently trades on the New Zealand Stock Exchange as AXA Asia Pacific Holdings Limited.

AXA New Zealand is in the business of providing financial advice and a range of products: investment, saving and superannuation products, life insurance and income protection policies, residential and commercial loans, and health insurance.

The company has 500 staff and 300 Advisers who meet the financial services needs of almost half a million customers.

AXA New Zealand has total funds under management of $3.6billion. Of this, $1.1 billion represents funds invested in registered superannuation schemes.

The Global AXA Group

The AXA Group operates worldwide. It has 40 million customers, spread over some 60 countries and worldwide workforce includes around 130,000 employees and advisers.

AXA Group has global assets totalling NZ$1,320 billion, and global revenues of NZ$118 billion.

Backgrounder: The Business Superannuation Market

Market trends *The business (employer) superannuation market is dynamic. Since 1990, stand-alone (also known as wholesale) schemes have declined in number by 58 per cent - from 2,242 schemes in 1990 to 1,159 in 1996 to 943 in 1998. Since 1996 stand-alone schemes have fallen in number by 18.6 per cent. *This trend is expected to continue as companies seek alternatives to wholesale schemes and look to provide more cost-effective staff benefits. Reasons for moving out of wholesale schemes include the cost of maintaining them, the imposition of trustees' liabilities on employers, their relative inflexibility, a desire to provide employees with the benefits of greater choice. *Decline in wholesale schemes does not mean a decline in the market for employer-based superannuation. Currently worth $2 billion, the business superannuation market is expected to grow by at least $1.22 billion over the next three years, reaching a market total $3.12 billion or more by 2003.

The rise of master trusts *Master trusts have been the main beneficiaries of the fall in demand for wholesale schemes and funds inflow from wound up wholesale schemes or by transfer of assets to master trusts. A trend which, AXA New Zealand analysts believe, will continue. *Master trusts have experienced a strong growth of 22% over the last year. *The popularity of master trusts is due to their:

*convenience and simplicity - companies join a ready-made

administration, trust and funds management package; effectively

outsourcing compliance with legislation and regulations;

*shared costs - members from many companies share the cost of

administration, funds management and trustee oversight; *imposition of reduced liability and responsibility on the part of employers. *monitoring of members' interests by a professional trustee.

AXA Business Superannuation (features and benefits)

AXA Business Superannuation is a third generation master trust developed for the market by AXA New Zealand in consultation with the market.

We've spoken to a number of asset consultants who have told us that they think AXA Business Superannuation is the most flexible business superannuation schemes in the market.

AXA New Zealand has created a product which is as "future proofed" as it is possible to be in a fast changing market - and fully in tune with today's market needs.

How AXA Business Superannuation works: *It is a registered superannuation scheme. Administration Manager is National Mutual Corporate Superannuation Services Limited. *Members' interests are specifically governed by the scheme's trust deed, which is administered by the Trustee, New Zealand Permanent Trustees Limited.

Features *The key feature of AXA Business Superannuation is flexibility of investment options and range of investment asset managers. It offers 28 investment options. *Flexibility through choice in a range of ready-made portfolios or build-you-own. There are ready-made portfolios, five asset sector specific multi-manager portfolios and 16 asset sector specific single manager portfolios. *Ready-made Portfolios: AXA Business Superannuation enables members to choose between two sets of portfolios totalling 7 composite portfolios (ranging from higher to lower risk mixes of asset classes). The asset classes are Domestic Fixed Interest, International Listed Property, International Fixed Interest, NZ & Australian Equities, International Equities and Cash.

There are: -Three multi-manager composite portfolios, managed by a range of prominent domestic and international investment asset managers. -Four similar composite portfolios managed mainly by AXA New Zealand. -Members can split their contributions between portfolios, which provides for added flexibility to suit different or changing needs. -5 Sector Specific Portfolios: these are portfolios in which the member can mix and match where their funds are invested. Allow the member to choose their level of contribution for each of the five asset classes. Once the member has chosen a split, their investment in each asset class is managed by a group made up of prominent fund managers - this spreads performance risk. -16 sector specific single manager portfolios -allow a member to determine the level of contribution for each asset class. The difference is that each asset class is managed by one fund manager - this enables members to choose their fund manager for all/some of the asset classes.

Benefits Shared costs AXA Business Superannuation operates under a master trust structure that allows individual employers to enter into one shared scheme. This means that the costs of running the scheme are shared by all. Low -hassle Minimal management involvement means employers time can be used to focus on the business Flexibility From ready-made to build-you- own portfolios. Employers can choose the contribution options and payment methods that suit their business. Choice Extensive range of investment options and prominent asset managers. Portable Members leaving can apply to switch to an AXA personal superannuation plan within the scheme. Ease & Efficiency An AXA Business Superannuation is easy to set up.

Costs * Fees are net of tax: Administration Fees - Monthly Member Fee ($6) - Scaled Plan Fee (Scaled % fee based on funds under management at plan level) - Investment Management Fee (Asset charge which varies between portfolios) - Withdrawal Fee ($50, payable after the 3rd withdrawal in any year) - Insurance Premiums (per member insurance cost) Advisory fees - Plan Fee(% fee based on funds under management at plan level and commission chosen) - Contribution Fee (% Contribution charge)

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