Advice may be missing as schemes wound up
Many providers and employers have opted to close individual super savings schemes rather than transition them to the new FMCA environment, under which it is more challenging to meet regulatory requirements.
Sovereign has been in the news this week as it winds up its Personal Superannuation Plan, citing the increased cost of managing it under the FMCA. Some members said they were not given enough information about the tax and governance implications of that.
Richard James, of NZ Funds, said there were lots of schemes closing down because it was too hard to bring them up to standard under the new legislation.
"It's a shame for clients who have spent decades accumulating wealth in a super scheme. Then the manager pays it out with no guidance supplied, they could end up frittering away that money. There is millions being paid out because the institutions can't be bothered bringing these schemes up-to-date."
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