Another KiwiSaver scheme closes
The Law Retirement KiwiSaver Scheme (LRKS) which is managed by Diversified Wealth Management closed to new members on April 1.
Monday, April 7th 2014, 6:36PM
The scheme, for legal professionals, has two funds, with just over $5 million in funds under management and 382 members.
Orginally Diversified was the adviser to the scheme but took over managing it around 18 months ago. Director Vicki Watson said various options were being considered for the scheme's future and no firm decisions had been made.
She said the increasing regulatory burden of running a KiwiSaver scheme had made LRKS uneconomic to run. Previously she thought critical mass was around $25 million funds under management, but now it was more likely to be around $100 million. Watson says this is likely to increase as new licencing requirements are introduced.
"The compliance costs have become too great for a small fund to survive," she said.
The Law Retirement Balanced fund has $3.3 million in FUM and 206 members according to its quarterly disclosure statement for the three months to December 31. The average return of the fund was 1.54% annually since March 2009.
The Dynamic Fund has $2.24 million in FUM and 176 members, and an annual average return of 1.15%.
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